Raw sugar enters H2 2026 at approximately 19 cents/pound, down 15% year-over-year, as the International Sugar Organization (ISO) forecasts a 3.5 million tonne surplus for 2026/27. Global production is projected at 185 Mt, up 2.5% from 2025.
Brazil's Center-South crop is forecast at a record 42 Mt, with mills allocating 52% of cane to ethanol and 48% to sugar — a ratio that shifts with ethanol price competitiveness. When ethanol prices exceed sugar parity, mills divert cane to fuel production, tightening sugar supply.
India's export policy remains the critical swing factor. With domestic production at 30-32 Mt and consumption at 27-28 Mt, India has a small exportable surplus. The government's decision on export quotas (currently restricted) will determine global flow direction.
Thailand's production is recovering at 10-11 Mt after drought-reduced 2025 output. The EU is forecast at 15-16 Mt, stable year-over-year.
ISO price projections for H2 2026 cluster at 17-22¢/lb.
Sugar buyers should secure H2 requirements at 18-20¢/lb through fixed contracts. The surplus structure creates a price ceiling, but Brazil's ethanol switch provides a floor. For food manufacturers, consider call options at 22¢/lb as upside insurance. Budget 18-23¢/lb for 2027.