Brazil's Dominance and GLP-1 Drugs Drive Sugar Market Shifts

The global sugar market is facing significant challenges due to slowing consumption and oversupply. According to Stephen Geldart, Associate Director at Czarnikow Group Limited, the biggest threat to sugar prices is not supply, but rather declining demand growth.

Geldart notes that India's recent decision to stop exporting sugar has had little impact on global markets. Instead, Brazil dominates global raw sugar supply, accounting for 72% of global supply in 2026. However, this dominance may lead to a price-independent export situation, where Brazilian mills prioritize ethanol production over sugar production.

The slowdown in sugar consumption growth rates is attributed to various factors, including declining fertility rates, increased awareness of sugar intake, and the growing use of GLP-1 receptor agonist drugs like Ozempic. These drugs have led to a significant reduction in sugar consumption, with global consumption falling by 30m tonnes since 2014.

Geldart also highlights the growth in Brazilian corn ethanol production as another key factor affecting sugar prices. The increasing supply of cheaper ethanol may lead to a decrease in sugar production and prices, further exacerbating the oversupply situation.