Raw sugar prices are projected to rise 10% to 15 US cents/lb by the end of 2026.
The global sugar market is projected to shift to a deficit of 1.5 million tons in the 2026/27 crop year, pushing white sugar prices up to $462.50 per ton by the end of 2026.
World sugar prices are poised for a new upward trend due to tightening global supply. According to a Reuters survey of 10 traders and analysts, ICE raw sugar futures are expected to end 2026 at 15 US cents/lb, an increase of approximately 10% from the closing price of 13.72 US cents/lb recorded on March 5th.
Outlook for sugar futures prices and market developments
Although the forecast of 15 US cents/lb is significantly higher than the current price, it is still slightly lower than the 15.01 US cents/lb seen at the end of 2025. This fluctuation reflects a marked shift in the supply-demand balance. Specifically, the market is moving from a surplus of 1.39 million tonnes in the 2025/26 season to an expected deficit of approximately 1.5 million tonnes in the 2026/27 season.
In line with the upward trend in raw sugar prices, the price of white sugar (LSUc1) is also projected to close 2026 at US$462.50/ton. This price represents a 13.8% increase compared to the trading session on March 5th and maintains an annual growth rate of 8.2%.
Impact from leading producing countries
Brazil prioritizes ethanol production.
The South-Central region of Brazil, a key supplier of global sugar, is projected to produce 40.38 million tonnes of sugar in the 2026/27 season, virtually unchanged from the previous season. However, a noteworthy point is that sugarcane production is expected to reach 625 million tonnes, an increase from the current season's 610 million tonnes.
The main reason why sugar production hasn't increased proportionally with sugarcane production is the change in processing rates. Brazilian mills are increasingly shifting towards producing ethanol biofuel. The proportion of sugarcane used for sugar production is projected to reach only 48.8%, down from 50.7% this season. This prioritization of ethanol in the South-Central region of Brazil is considered one of the main drivers of rising sugar prices.
Supply pressure in India
In India, the world's second-largest sugar producer, output for the 2026/27 season is projected to reach 29.9 million tonnes, a slight increase from the 29.5 million tonnes of the 2025/26 season. However, actual figures from the All India Sugar Trade Association (AISTA) reveal short-term challenges.
| Sugar Production Index (Million tons) | 2025/26 Crop Year (New Forecast) | 2025/26 crop year (Previous estimate) |
|---|---|---|
| Actual Production (AISTA) | 28.3 | 29.6 |
| Total potential output | 31.5 | But |
| Sugarcane is being diverted to ethanol production. | 3.2 | But |
According to AISTA, sugarcane yields in key growing regions such as Maharashtra and Karnataka are lower than expected due to unusual weather patterns. Of the total potential output of 31.5 million tonnes, approximately 3.2 million tonnes will be diverted for ethanol production, further putting pressure on the international refined sugar supply.
