Datagro: Global sugar deficit will increase between the current and next season

Datagro, a consultancy, said on Wednesday that the global sugar'market' is projected to have a deficit in 2026/27 of 2,68 million metric tons, compared to an 800,000 ton shortfall in 2025/26.

The projected deficit is based on a stable sugar production compared to the previous season, in Brazil's central-south region. Brazil is the world's biggest producer.

Datagro predicts sugar production in the region of 40.7 millions tons by 2026/27 compared to 40.77 million tonnes in 2025/26. Cane crushing will also increase from 610.5 million tons the previous season to 635million tons.

Datagro President Plinio Natari stated that "With these relative price, with ethanol being much more expensive, producers will undoubtedly prioritise?ethanol production".

"And here is the concern: Brazil provides 75% of global raw sugar?market and Brazil will produce ethanol instead of sugar," he said.

Nastari stated that India may reduce its'sugar production' in 2026/27 to below the 30,000,000 tons predicted for 2025/26. This is especially true if the monsoon rainfalls are weaker due to El Nino.

Datagro stated that Thailand's production is expected reduce to 9.7 millions tons by 2026/27 from 10.58 in the previous year. The European Union, on the other hand, is expected cut its production to 14.10 from 15.72 in 2025/26.

Datagro estimates that raw sugar prices at the New York Exchange - nearing five-year lows of below?14 per pound – are below production costs in Brazil and Thailand as well as India.

Nastari stated that it was difficult to imagine prices remaining below the marginal cost of production for a long time.

Nastari stated that due to the low global sugar prices, rising costs, and the more competitive economics of ethanol, Nastari expects to see a drop in sugarcane production to 48.5% by 2026/27, from 50.7% for 2025/26.

The Brazilian demand for hydrous-based fuels is expected to increase from 21,23 billion liters in 2012 to 24,18 billion liters by 2014. Nastari stated that the proportion of flex-fuel cars running on hydrous will again exceed 30%.

(source: Reuters)