Sugar turns towards deficit: India's import window, Brazil's cane and what buyers should watch

Sugar prices spent most of 2025 falling as the world produced more than it used. In 2026 the picture has turned. Forecasters now expect a deficit in the 2026/27 season, India has opened a duty-free window for raw sugar imports, and a strong El Niño threatens cane in Asia. This note explains what has changed and what it means for buyers of refined white sugar and raw sugar. Figures are as reported up to 26 September 2026.

Prices have turned

The FAO Sugar Price Index averaged 106.4 points in August 2026, up 11.9% from July, the largest monthly increase of any food group. FAO linked the rise to growing concern about the world supply outlook for 2026/27, adverse weather in Europe and Asia, lower production in Brazil and India's decision to allow duty-free raw sugar imports.

Raw sugar futures were about 18.5 US cents a pound on 25 September 2026, around 5% higher than a month earlier and about 13% higher than a year earlier.

Forecasters expect a deficit, but not how large

In its May 2026 Quarterly Market Outlook, the International Sugar Organization forecast world production of about 180 million tonnes in 2026/27, down 1.15%, and a small deficit of about 262,000 tonnes after a surplus in 2025/26. It named the possible effect of El Niño on harvests in India and Thailand as a key risk.

Private forecasts vary widely. Datagro, for example, forecast a deficit of about 3.17 million tonnes. The gap between forecasts is itself useful information: it shows how much depends on weather in Asia and on how much cane Brazil's mills turn into sugar rather than ethanol.

India: from exporter to importer, for now

India is normally one of the world's largest sugar exporters. On 20 August 2026 the government allowed 1 million tonnes of raw sugar to be imported duty-free until 31 October 2026, its first large import move in years. It followed a sharp rise in domestic prices ahead of the festival season, low opening stocks and uncertainty about the next crop.

India Ratings and Research expects domestic prices to ease from their record highs but stay firm, because stocks are tight and the cost of cane is rising. India's crushing season starts in October, and decisions on how much cane goes to ethanol will shape how much sugar the country has to sell or buy next year.

For buyers who usually source white sugar from India, this means Indian export availability in 2026/27 is uncertain and should not be assumed.

Brazil and Thailand

Brazil's Centre-South is the world's largest sugar exporting region and the main source of raw sugar and much of the refined white sugar traded internationally. At the start of the season the market expected a large cane crop, but FAO reported lower Brazilian production in August, and mills can shift cane between sugar and ethanol depending on which pays more. When oil prices are high, more cane can go to ethanol.

Thailand is the other large Asian exporter. Along with India, it is where the ISO sees the main El Niño risk for the 2026/27 crop. Our note on El Niño and crop supply explains the forecast.

What this means for buyers in Africa, the Middle East and Asia

Importers for direct use usually take refined white sugar (ICUMSA 45) in bags or containers, while refineries buy raw sugar in bulk. In a tighter market we suggest:

• Cover further ahead. Fixing part of the first half of 2027's needs earlier reduces the risk of buying at the peak of a deficit year.
• Keep origins open. Brazil remains the largest exporter, and its crop is less exposed to this El Niño than India's or Thailand's. Have Brazilian supply qualified alongside any Asian origin you already use.
• Specify clearly. For white sugar, agree ICUMSA colour, polarisation, moisture, ash and granulation. For raw sugar, agree polarisation and the premium or discount scale. Have both checked by an independent inspector at loading.
• Packing and shelf life. Agree bag type, lining and marking, and plan storage at destination, as humidity affects bagged sugar.
• Documents. Certificates of origin, health or phytosanitary certificates and any import licences at destination should be checked before the cargo is loaded.

We will update this note after the ISO's next outlook and as the Indian season starts. See our sugar page for the grades and origins we work with, or send us your requirement.