World’s Leading Sugar Trader Lowers Global Surplus Outlook

The world’s largest sugar trading firm has adjusted its forecast for the global surplus in the coming season, cautioning that the market may be underestimating the potential risks from weather and transportation challenges in Brazil, the top producer.

For the 2025-26 season, total production is now expected to surpass demand by a mere 400,000 tons, a notable decrease from earlier estimates of a surplus of approximately 1.5 million tons just two months prior, as stated in Alvean’s presentation during New York Sugar Week. They anticipate a deficit of 5.5 million tons for the season ending September 2025.

Raw sugar futures hit their lowest level since 2021 earlier this month, as traders braced for a possible oversupply. Alvean’s projections for 2025-26 are on the lower spectrum of the estimates shared at the industry conference, with numerous analysts and traders voicing expectations of much larger oversupplies.

“There’s a certain level of complacency concerning optimism about production and its potential rebound,” said Mauro Virgino, Alvean’s head of trading intelligence, in an interview. “In the past seven years, we’ve seen more disappointments than positive surprises,” he added.

The Center-South region of Brazil is expected to produce 40.9 million tons in 2025-26, although this could fall to 39.2 million tons if yields are inadequate, according to Virgino. The region is forecasted to process 593 million tons of cane under base-case scenarios, which represents an almost 5% decrease from the previous year. This could decline to just 575 million tons should April and May yields underperform, partly due to dryness.

Shipping operations from Brazil have recently been running smoothly, allowing consumer nations to adopt a “just-in-time” demand strategy with low inventories, he observed. “Typically, there should be some complications.”

Alvean’s estimate of a modest global surplus hinges on a recovery in supply from Asia. India is projected to produce 31 million tons in 2025-26, reflecting a 19% increase. Thai production is expected to grow by a million tons to reach 11.1 million.

“I believe unforeseen challenges may emerge from Asia,” Virgino cautioned. “Weather variability remains a significant factor; we’re anticipating a considerable increase.”

Alvean predicts prices to stay within the 17 to 20 cents per pound range, contingent on favorable weather conditions in Asia and Brazilian output reaching 41.5 million tons. However, any disruptions could lead to a price fluctuation between 19 and 24 cents.

© 2025 Bloomberg

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