StoneX raises 2026/27 global sugar deficit forecast to 1.7 million tonnes
StoneX has raised its forecast for the 2026/27 global sugar deficit to 1.7 million tonnes from 550,000 tonnes. Adverse weather in Northern Hemisphere producing regions and changes in Brazilian mills’ production strategy have tightened the outlook.
Deficit estimate more than triples
StoneX has raised its forecast for the global sugar deficit in the 2026/27 season to 1.7 million tonnes, more than three times its previous estimate of 550,000 tonnes. The season runs from October to September. The revision points to a wider gap between production and consumption after the consultancy’s first outlook already indicated that the market would move back into deficit following two years of surplus.
Forbes Brasil and Globo Rural reported that adverse weather in major Northern Hemisphere production centres was a central reason for the change. The revised balance also reflects a reassessment of the strategy followed by Brazilian mills, which can alter the share of sugarcane directed to sugar or ethanol. Together, these factors reduce the supply cushion available to the international market.
Northern Hemisphere crops face pressure
The earlier StoneX outlook identified India, Thailand and Europe as important sources of production risk. Losses in those regions were expected to outweigh growth elsewhere. In the European Union, StoneX had estimated a 6.1% decline in the area planted with sugar beet, citing weak crop profitability after lower international prices and increasing plant-health risks.
China offered a partial counterweight. StoneX’s initial forecast put Chinese sugar production at 12.5 million tonnes in 2026/27, which would represent a third consecutive year of growth. Government incentives and the improved economic appeal of sugarcane relative to competing crops supported that expansion, but StoneX said the increase would not offset projected losses in India, Thailand and Europe.
The move from a 550,000-tonne deficit to 1.7 million tonnes shows how quickly weather-related changes can affect the balance. Importers and refiners are particularly exposed when several Northern Hemisphere suppliers encounter weaker crops at the same time, because alternative volumes become more dependent on Brazil and on the timing of its export season.
Brazilian mill strategy becomes decisive
Brazil remains the main pillar of global supply, but mills can respond to relative returns in the sugar and fuel markets by changing their production mix. StoneX’s earlier scenario projected 41.5 million tonnes of sugar from Brazil’s Centre-South in 2026/27, up 6%, based on higher crushing and an expectation that mills would eventually allocate more cane to sugar. The latest revision indicates that mill strategy now provides less support to the global sugar balance than previously assumed.
This flexibility links sugar availability to Brazilian ethanol economics. When ethanol offers better returns, mills can direct more cane juice toward biofuel, limiting sugar output even if the cane harvest or crushing volume increases. Producers gain an alternative revenue channel, but international refiners and importers face less certainty over the volume available for export.
The larger deficit is a bullish signal for world sugar prices, although it does not by itself establish the size or timing of any increase. Prices will remain sensitive to crop development in the Northern Hemisphere, Brazilian mill decisions and the availability of carry-in stocks. For traders and industrial buyers, the revised StoneX forecast increases the importance of weather monitoring and procurement timing during the 2026/27 season.
