Global Sugar Market Tightening? Here's What Pakistan and India's Moves Mean

London white sugar just hit a 6-week high, and there’s more going on than meets the eye. Pakistan just announced it’s hunting for 100,000 MT of refined white sugar, with plans to import up to 750,000 MT this year. Sounds like buying pressure, but the bigger story is the clash between supply signals from Brazil and India.

The Brazil Wild Card

Conab dropped a bombshell: slashing Brazil’s 2025/26 production forecast by 3.1% to 44.5 MMT. That’s down from 45.9 MMT. Here’s the kicker—while total output is falling, Brazil’s mills are crushing more cane for sugar instead of ethanol. The Center-South region crushed 54.10% of cane for sugar in July’s second half, up from 50.32% year-ago. This pivot toward sugar production is propping up prices despite lower yields.

India’s Surplus Bomb

But India threatens to flip the script. Monsoon rains hit 650.3 mm as of late August—2% above normal. Result? India’s 2025/26 sugar output is projected to surge 19% y/y to 35 MMT, bouncing back from 2024/25’s 5-year low of 26.2 MMT. The Indian Sugar and Bio-energy Manufacturers Association is eyeing 2 MMT of exports next season. When the world’s second-largest producer starts exporting, it’s bearish.

The Surplus Math

Here’s where it gets messy. Czarnikow projected a 7.5 MMT global sugar surplus for 2025/26—the biggest in 8 years. The USDA forecasts global 2025/26 production hitting a record 189.318 MMT, with consumption at 177.921 MMT. That’s a 11.4 MMT buffer. Ending stocks? Expected to climb 7.5% y/y to 41.188 MMT.

Thailand (world’s third-largest producer) also boosted output 14% y/y to 10 MMT in 2024/25, adding more supply pressure.

Bottom Line

London sugar popped on Pakistan’s demand, but it’s fighting a tide. Brazil’s shift to sugar production helps prices short-term, but India’s monsoon-fueled export push and a massive projected global surplus could weigh on the market through 2025/26. The sweet spot for bulls is narrowing.