ISO predicts that the global sugar market will turn into a deficit in 2026/27

ISO, the International Sugar Organization, has made its first estimation for the season ahead. It expects that the global sugar market will flip into a deficit in 2026/27 of?0.262 millions metric tons.

Inter-governmental 'body' identifies increased risk due to El Nino weather phenomenon. In a quarterly report on Monday, it said that the deficit forecast is primarily driven by a 2 million tonne fall in production. ISO has raised its estimate of the global sugar surplus for 2025/26 season (October/September). It was previously estimated at 1.22 million metric tons.

The outlook for the price over the next 3 months is neutral, as the surplus in 2025/26 is modest. Stock building, fueled by fears?over reduced fertiliser use (and) an increase in price hedging could support prices, it said. Fuel ethanol production, which is made from organic inputs such as sugarcane and corn, will rise to 129.4 bln litres in 2026, up from 123.1 bln litres, according to the ISO. This is due to a rebound of Brazilian output, along with expansion in India. The ISO expects 2026 ethanol consumption to rise from 122.9 billion to 126.9 billion litres, still a long way below production levels. The ISO said that the soaring oil prices following the Persian Gulf Conflict have prompted a renewed interest in biofuels. Several countries have expanded or introduced blending programs, and Brazil India and the EU have been actively looking at a step-up?in blends to E32, E25, and 'E20, respectively.

When oil prices increase, biofuels can be blended with gasoline or used as a replacement for diesel. (Reporting and editing by May Angel)

(source: Reuters)