Sugar

What it is

Sugar in global trade means sucrose extracted from two crops: sugarcane (about 80% of world output, grown in tropical and subtropical climates) and sugar beet (temperate climates, notably the EU, United States, and Russia). Brazil leads global production, with a 2025-26 season forecast around 45 million metric tonnes, roughly a quarter of the USDA's projected global total of 189.3 million metric tonnes. India ranks second at around 30 million metric tonnes, followed by Thailand, China, and the EU. The International Sugar Organization (ISO), an intergovernmental body based in London, maintains the authoritative world supply-and-use balance across 150-plus countries. Raw sugar trades on ICE No. 11 futures in New York (priced in US cents per pound); refined white sugar trades on ICE No. 5 in London (priced in US$ per tonne). As of early July 2026, the ISO ISA Daily Price stood at 15.41 US cents per pound.

History

Sugarcane cultivation originated in New Guinea around 8000 BCE, spread through South Asia and the Middle East, and reached the Americas via European colonizers in the 16th century, where production scaled on enslaved labor. Sugar beet was developed commercially in Europe in the early 19th century as a substitute for blocked Atlantic supply. Through most of the 20th century, global trade was managed through preferential arrangements: US Tariff Rate Quotas for Caribbean and other allied producers, EU guaranteed prices for ACP and EBA countries (abolished in the EU's 2017 market reform), and India's cyclical export quota system. India imposed a near-total export ban in 2022-23 and again in May 2026. Brazil has historically exported freely but regularly redirects cane to ethanol when oil prices make fuel more profitable than raw sugar.

Current state

As of mid-2026, the global market is in surplus. The USDA's May 2026 report puts production at 189.3 million metric tonnes against consumption of roughly 178 million metric tonnes. Brazil controls approximately 48% of global export trade, shipping around 35.7 million metric tonnes in the 2024-25 marketing year. India's prohibition on raw and white sugar exports, effective May 13, 2026, under DGFT Notification No. 16/2026-27, pulled the world's second-largest exporter from the market through at least September 30, 2026, pushing New York No. 11 futures up more than 2% and London No. 5 about 3% on the announcement day. Buyers in South Asia, East Africa, and the Middle East that had relied on Indian supply shifted toward Brazilian and Thai alternatives. See 생산량이 소비량에 미치지 못하자 인도, 2026년 9월까지 설탕 수출 금지. Demand faces structural headwinds: sugar taxes are in force in more than 50 countries as of 2026, including the UK and Mexico, and uptake of GLP-1 weight-loss medications is dampening consumption growth in high-income markets.

Relationships

Brazil's allocation of sugarcane between sugar and fuel ethanol shifts with relative oil-sugar prices, making crude oil markets a secondary driver of sugar export supply. India's E20 ethanol blending mandate, targeting a 20% blend rate, similarly consumes cane tonnage that would otherwise become exportable sugar, tightening its domestic supply balance. Thailand, the world's third-largest exporter, faces farmer switching toward cassava when cane returns are weak. The European Union, now a net importer since its 2017 quota abolition, is exposed to global price volatility in a way it was not a decade ago. China produces roughly 12.6 million metric tonnes domestically in 2025-26 but remains a net importer; any shift in its purchasing posture can tighten the global balance quickly given its consumption scale of around 15 million metric tonnes per year. Sugar is a significant input cost for food and beverage manufacturers worldwide, and margin pressure from price spikes passes through to consumer prices in price-sensitive markets.

What to watch

• Whether India lifts or extends its export ban beyond September 30, 2026, and the state of sugarcane crops in Maharashtra and Uttar Pradesh after the 2026 monsoon season.
• Brazil's 2026-27 output, forecast around 40 million metric tonnes, down from 2025-26 as ethanol margins draw cane away from sugar production.
• Structural demand contraction from sugar taxes and GLP-1 drug adoption in high-income markets, and whether growth in lower-income markets offsets it.
• China's import policy and purchasing posture, given its capacity to move global prices if it shifts from modest to aggressive buying.
• ISO quarterly Market Outlook releases and the ISA Daily Price as near-term supply-balance signals.