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Global sugar markets face mounting supply pressures as the world’s top two producers navigate competing demands for biofuel production, with India warning that ethanol output from sugarcane juice could collapse without price support, while Brazil accelerates its shift toward fuel over food amid El Nino weather threats.
India’s sugar industry is calling for significant ethanol price increases to prevent producers from abandoning biofuel manufacturing in favor of sugar, potentially limiting the country’s ethanol output to just 3 billion liters from molasses alone in the 2026-27 season, Atul Chaturvedi, executive chairman of Shree Renuka Sugars, said at the Sugar, Ethanol and Bioenergy conference in Mumbai on June 12-13.
«If the price of ethanol from sugarcane juice is not jacked up, I would not be too surprised if the industry says, forget ethanol, we might as well produce more sugar, — Chaturvedi said. — With El Nino sitting on our head and the cane crop not likely to be better than what it was this year, probably it’s going to be lower than this year».
The warning comes as the US Department of Agriculture projects global sugar production will decrease to 184.9 million metric tons in 2026-27, with lower output in Brazil, the EU, the US and Thailand expected to more than offset higher Indian production. The International Sugar Organization projects a global supply deficit of about 262,000 mt for 2026-27, with production expected to drop by 2 million mt amid growing concern about El Nino risks.