European sugar processors are responding to elevated inventory levels with 2026 acreage reductions that dramatically exceed initial forecasts, while Brazilian mills conclude operations earlier than typical and Indian authorities authorize exports amid complex domestic pricing dynamics.
European sugar processors announced significantly larger acreage cuts for 2026 than initially forecast, with reductions now trending toward the higher end of the 3-9% range despite growers having already ordered seed and finalized planting plans. Initial 2026 acreage forecasts of 3-9% reduction were dramatically exceeded as processors announced significantly larger cuts.
Southern German producers proposed EUR 10/tonne premiums on all 2027 contracted beets in exchange for voluntary area cuts, while the Netherlands reduced allocation to 90% of 2025 levels and Poland implemented 10% cuts with base prices dropping to EUR 28-32/tonne before coupled support.
The current 2025/26 campaign is nearing completion with harvesting 75% finished across major zones under favorable conditions, though heavy Polish rainfall complicated field access. The Netherlands maintained 17.3° sugar content and Italy reached 110,000 tonnes total production.
European sugar Common Market Organisation faces growing criticism as industry calls the current framework “not fit for purpose,” with contradictory policies combining subsidies, world price imports under Inward Processing Relief, and preferential access creating a dysfunctional regulatory environment.
Inward Processing Relief imports dominated raw sugar flows from October 2024 to August 2025, with Brazil supplying 1.44 million tonnes, representing 73% of total raw imports. An industry coalition submitted a formal complaint to the Commission calling for IPR suspension under Article 195, citing displacement of preferential origin suppliers.
In Brazil, from April to October, Center-South mills maintained elevated sugar allocation at 52.0% versus 48.6% last season despite cane crushing declining 2.0% year-over-year to 556.0 MMT. An additional 50 mills are planned to complete operations in the second half of November, bringing total concluded units to approximately 120.
Looking toward 2026/27, industry forecasts point to a crushing recovery around 615 MMT (+3.1%), though sugar allocation is expected to moderate from this season’s elevated 52% as ethanol economics continue favoring ethanol production.
In India, the government authorized 1.5 MMT sugar exports for the 2025/26 season, allocated uniformly at 5.3% of each mill’s three-year average production. Production forecasts point to 34.35 MMT gross output with 30.95 MMT net after 3.4 MMT ethanol diversion.
This newsarticle is part of a more comprehensive sugar market analysis, for the full analysis, go to: https://app.vespertool.com/market-analysis/2479
