The global sugar market is facing increasing pressure as growing demand for biofuels intensifies competition for sugarcane, with major producers India and Brazil directing a larger share of the crop toward ethanol production and reducing sugar availability.
Industry trends in both countries indicate that the balance between food and fuel use is becoming an increasingly important factor influencing global sugar supply and price movements.
In India, industry participants have indicated that further growth in ethanol production could remain limited unless pricing conditions improve. Producers say current economics may encourage some mills to shift a greater portion of sugarcane back to sugar manufacturing instead of expanding ethanol output.
Under existing market conditions, ethanol production from molasses during the 2026–27 season is projected to remain constrained at around 3 billion litres if profitability does not improve.
Brazil, however, is moving in a different direction.
Producers in the world’s largest sugar-exporting country are increasing their focus on ethanol production as weather-related uncertainty associated with the El Niño phenomenon affects crop planning and processing decisions.
The trend is intensifying competition for sugarcane between fuel and food applications and adding further pressure to global sugar supplies.
The changing production mix in India and Brazil comes at a time when worldwide sugar output is expected to soften.
According to projections from the U.S. Department of Agriculture, global sugar production in the 2026–27 marketing year is forecast to decline to 184.9 million tonnes.
Lower output across Brazil, the European Union, the United States and Thailand is expected to outweigh production gains projected in India.
The International Sugar Organization (ISO) has also projected a global sugar deficit of approximately 262,000 tonnes.
With weather uncertainty continuing to influence crop outlooks and ethanol demand rising, competition for sugarcane is expected to remain a key factor shaping global sugar availability and driving price trends in the coming seasons.
