Green Pool raises 2026/27 global sugar deficit forecast to 4.3 million tonnes
Green Pool raised its forecast for the 2026/27 global sugar deficit to 4.3 million tonnes from 1.66 million tonnes. Higher energy prices and stronger incentives to produce ethanol are expected to reduce the share of cane used for sugar in Brazil’s Center-South.
Deficit estimate more than doubles
Green Pool has raised its forecast for the global sugar deficit in the 2026/27 season to 4.3 million metric tonnes, up from its previous estimate of 1.66 million tonnes. Reuters reported the revision on May 1, describing a market in which elevated energy prices are strengthening the incentive for mills to turn sugarcane into ethanol rather than sugar.
The adjustment widens the projected shortfall by 2.64 million tonnes. It also reverses the more comfortable supply expectations that had shaped earlier assessments of the season. For sugar producers, refiners, traders and industrial buyers, the revised balance increases the importance of production decisions in Brazil, where mills can alter the allocation of cane between sugar and biofuel.
Brazilian mills expected to favour ethanol
Green Pool now expects mills in Brazil’s Center-South region to direct 45% of crushed cane to sugar production, down from its earlier assumption of 48.1%. The 3.1-percentage-point reduction is central to the larger global deficit because the region is a major source of internationally traded sugar.
The Australian sugar and biofuel consultancy linked the change to a firmer Brazilian real, higher global gasoline prices and a growing probability that Brazil could adjust fuel taxes or increase the mandatory share of ethanol blended into gasoline. Together, those factors improve the outlook for ethanol production and make fuel more competitive with sugar as an outlet for cane.
Weather adds another operational risk. Rain can slow harvesting and crushing in the Center-South, delaying the arrival of sugar and ethanol from the new crop. Hot conditions affecting other producing areas may also reduce agricultural performance. The effect on the final balance will depend on the duration of these conditions and on how mills adjust their production mix as the season advances.
Prices respond to tighter supply outlook
Reuters reported that raw sugar futures on ICE climbed to a three-week high on May 1. The most-active contract was up 2.2% at 14.93 cents per pound at 14:42 GMT after touching 14.98 cents per pound. The move reflected concern that the expected deficit would be larger and that high energy prices would limit sugar production.
The market must nevertheless distinguish between the projected 2026/27 balance and immediately available supply. Preliminary information from two sugar traders put deliveries against the expiring May ICE raw sugar contract at about 483,400 tonnes. That volume provides a measure of physical availability at contract expiry but does not remove the forward risk created by a lower Brazilian sugar mix.
For processors and import-dependent buyers, the main variable is no longer cane availability alone. The relative return from sugar and ethanol will influence how much Brazilian production reaches the food market. A stronger real, gasoline prices and Brazilian fuel policy could therefore affect global sugar supply even if crushing volumes remain substantial. Exporters and traders will be watching the pace of Center-South operations, weather interruptions and any change in the sugar-production share against Green Pool’s new 45% assumption.
