Sugar Prices Rebound Sharply After Global Lows

Global sugar markets have shifted abruptly from the multi-year lows recorded in late September and early November, with benchmark prices now climbing as production shortfalls across major exporters tighten supply. The reversal follows months of expectations for continued weakness through 2026—forecasts that likely influenced Belize’s recent discussions on domestic price adjustments for plantation white and brown sugar.

The rally comes as severe drought conditions constrain output in Brazil’s Center-South region following a strong 2023/24 and early-2025 mill output. India’s crop has been hit by unusually dry monsoon patterns, prompting authorities to prolong export restrictions and consider lower allocations for 2025/26. Thailand is reporting similar weather-related stress. Collectively, these disruptions have erased earlier expectations of ample supply that pushed prices down through September.

International agencies have started to revise their balances accordingly. The International Sugar Organization has projected a nine-year-high deficit of 5.47 million metric tons for 2024/25, while private analysts and USDA estimates point to a multi-million-ton shortfall and a 4.7 percent drop in global inventories by early 2025. These tightening fundamentals contrast sharply with last quarter’s World Bank and FAO outlooks, which anticipated continued easing on the strength of Brazil’s large sugar mill output and improved prospects in India and Thailand.

Demand remains firm, particularly in emerging markets with rising consumption of processed foods and beverages. Growth in ethanol demand adds further complexity: when crude oil prices support biofuel economics, mills may divert more cane to ethanol, reducing sugar availability and amplifying price volatility.

For corporate players, the shift is uneven. Sugar and ethanol groups such as Brazil’s Cosan stand to benefit from stronger prices if output volumes hold, while commodity traders like ADM and Bunge may capitalize on volatility. Food and beverage manufacturers reliant on refined sugar face higher input costs, renewing pressure on margins after months of relief from falling benchmarks.

Government intervention continues to reshape market expectations. India’s export restrictions and Mexico’s recent 156 percent tariff on imports to protect domestic producers reinforce the policy risks that can amplify or blunt price swings. Market analysts note that the renewed rally also reflects investor sensitivity to such trade measures after weeks of unusually low speculative positioning.

The turnaround has direct implications for Belize. Cane-farmer revenues track export realizations, meaning that any sustained price increase could moderate the downside risk previously projected for the 2025/26 crop year. Last month’s domestic discussions on adjusting controlled prices for plantation white and brown sugar were framed against a backdrop of weakening international returns, four-year-low FAO sugar readings, and multi-year-low futures. The new global trajectory complicates that policy calculus.

Belizean stakeholders will need to watch several variables closely: Brazil’s upcoming harvest, India’s final export decision, and the pace of recovery in Thailand’s cane yields. Local disease pressures—including froghopper, stem borer, and Fusarium wilt—remain material risks that can offset gains from any global price uplift. Additionally, if high international prices persist, regional contraband pressures may intensify, especially should domestic retail adjustments widen price differentials with neighboring markets.

The rebound also feeds into broader food-inflation dynamics. Sugar is a significant component of the FAO global food index, and higher prices can raise production costs for downstream manufacturers. Economists warn that, if sustained, the rally could add marginal upward pressure to global food prices after months of easing.

Market conditions remain fluid. Analysts highlight that sugar markets have historically cycled through pronounced peaks and troughs driven by weather and policy decisions. While improved rainfall or a stronger-than-expected harvest in any major producing region could soften prices again, the present structural tightness—shaped by climate-related constraints and robust demand—suggests heightened volatility heading into 2026.

For Belize, the shift underscores the need for agile policy responses and sustained investment in climate-resilient cane production. The months ahead will determine whether the current rally represents a temporary correction or the start of a more persistent tightening phase in global sugar markets.