OECD‑FAO Agricultural Outlook 2025‑2034

4. Sugar

Abstract

This chapter describes market developments and medium-term projections for world sugar markets for the period 2025-34. Projections cover consumption, production, trade, and prices for both sugar crops (sugar beet and sugarcane) and the sweetener complex, including raw sugar, white sugar, molasses, and high fructose corn syrup (HFCS). The chapter concludes with a discussion of key risks and uncertainties which could have implications for world sugar markets over the next decade.

4.1. Projection highlights

Low- and middle-income countries across Asia and Africa are expected to drive the growth of global sugar demand, fuelled by sustained population and disposable income growth. Faster growth in per-capita sugar intake is anticipated in low-income countries, although it will remain well below the global average.

Moderate demand will prevail in other regions. In high-income countries, slower population growth and shifting consumer preferences, driven by health concerns about high sugar intake, result in stable sugar consumption. In countries like The People’s Republic of China (hereafter “China”) or Japan, where per capita consumption is relatively low, dietary preferences for low-sugar products will continue to prevail.

Sugar production is expected to expand, with sugarcane continuing to drive over 85% of total production. Brazil is projected to consolidate its position as the world’s leading producer due to the expansion and replanting of its sugarcane plantations. Varietal improvements and higher extraction rates are expected to drive production increases in India and Thailand. The European Union will remain the main sugar beet producing region. However, competition for land use from other crops and the reduced availability of plant-protection products, which increases the risk of disease spread, are expected to limit sugar production.

Sugar crop-based ethanol production will continue to shape sugar markets. In Brazil, the allocation of sugarcane between its main uses—sugar and ethanol—is expected to continue in response to outlet optimization, though international sugar market conditions are anticipated to favour export-oriented sugar production. While in India, sugarcane‑based ethanol production will be supported by the government measures to diversify the sector.

Exports are projected to be increasingly concentrated, while imports will remain more evenly distributed. Brazil is expected to reinforce its leading exporter position, followed by Thailand and India, with nearly 52%, 14% and 8% of global exports respectively in 2034. The global distribution of raw (61%) and white sugar (39%) trade is expected to remain stable over the outlook period. Import demand will originate in low- and middle-income countries in South Asia and Africa, driven by growing demand and limited production possibilities in these markets.

Sugar prices are expected to decline slightly over the Outlook period, although subject to many uncertainties, including extreme weather events, Brazil’s dominance in the global sugar market, and fluctuations in the relative profitability of sugar compared to ethanol.

4.2. Current market trends

International prices of sugar have generally declined since the start of the 2024/25 season in October. In late 2024, good harvest progress and beneficial rainfall in key southern growing areas of Brazil weighed on prices. The start of the crushing season in India and Thailand exerted further downward pressure. The weakening of the Brazilian real against the United States dollar in the last quarter of 2024 also contributed to the decline in world sugar prices. However, concerns over a deteriorating production outlook in Brazil and India limited the decline and caused a strong price increase in February 2025.

World sugar production in the 2024/25 season is anticipated to be 3% lower than last year’s bumper level, mainly due to expected reduced output in India and Brazil. In India, the decline is primarily attributed to reduced yields in major producing states, affected by prolonged dry weather conditions. Similarly, in Brazil, despite improved rains in late 2024, production is forecast down from the bumper level last year mainly due to earlier dry conditions and low precipitation in February and early March 2025. The decline in these countries is expected to more than offset a significant production rebound in Thailand, stemming from favourable weather conditions and an expansion in area triggered by attractive farm-gate prices. Larger sugar outputs are also seen in China and the European Union.

On the demand side, world sugar consumption is foreseen to remain close to its level in the previous season amid prospects for relatively steady global economic growth. The current production and consumption forecasts are expected to push the sugar market into a global production deficit.

With lower exportable availabilities from Brazil and India more than offsetting higher shipments from Thailand, world sugar trade in 2024/25 is predicted to contract compared to the previous season. Global import demand is anticipated to decline mainly reflecting lower imports from India compared to the record 3.6 Mt imported last season, as well as lower imports from the United States, Mexico and the European Union.

4.3. Market projections

4.3.1. Consumption

Over the next ten years, global sugar consumption is projected to expand by 1.2% p.a. and reach 202 Mt by 2034, driven by population and income growth.

Sugar, a fibre-free carbohydrate, is a common ingredient in numerous food and beverage products and represents a key source of energy in the human diet. High levels of sugar consumption are associated with health concerns and WHO recommends reducing the intake of free sugars (i.e. sugar added to foods during production or cooking including sugars found in honey, syrups, and fruit juices) to less than 10% of the total daily energy intake. All regions covered in this Outlook, except the Americas and Oceania, will see an increase in per capita intakes of caloric sweeteners,1 but disparities will persist within regions. The largest increase will take place in the highly populated regions of South and Southeast Asia (Figure 4.1).

Global growth is mainly driven by Asia and Africa

With the projected rapid growth in population and income Asia and Africa are expected to contribute the most to the increase in global demand compared to the reference period, accounting for 64% and 29% of the world total growth, respectively. Dietary shifts driven by urbanisation and increasing disposable incomes are expected to be key drivers of the increase. However, by 2034, per capita consumption is anticipated to reach 15.6 kg in Africa and 21.2 kg in Asia, both below the projected world average of 23.1 kg/person.

In Asia, India is expected to contribute the most to the overall increase in sugar consumption, followed by Indonesia, Pakistan and then China. In these countries, except China, population growth and rising income are expected to sustain demand for processed food and beverage products over the next decade. In China, most of the demand growth is expected to come from smaller and less developed cities, while in larger, more developed cities, health concerns and government awareness campaigns are likely to slow growth. In terms of per capita food consumption, Asian LDCs are expected to be the main drivers of the region’s annual growth of 1.5% over the next decade.

Across Africa, Least Developed Sub-Saharan countries are expected to record the highest growth rate in per capita consumption, primarily due to projected increases in disposable income and higher spending on processed foods and beverages. Growth is also expected in North Africa. By contrast, in South Africa, the declining trend in per capita sugar consumption recorded in recent years–amid government measures to discourage its use, including the Sugar-Sweetened Beverage (SSB) taxation and public health campaigns–is expected to persist over the next decade; with many food manufacturers reformulating their products to reduce sugar content.

Over the coming decade, Asia and Africa will remain the regions where the diet will include the greatest proportion of staple foods which are rich in carbohydrates, and the lowest proportion of caloric sweeteners, particularly in Sub-Sahara Africa.

Downward trends in caloric sweetener consumption are expected to continue across other traditionally high-consuming regions

Traditionally, the Americas, the Caribbean and European countries record the highest level of per capita sugar consumption with caloric sweeteners accounting for at least 12% of dietary carbohydrates and exceeding 20% in the United States in particular. Since 2010, caloric sweetener consumption in these countries has been trending downwards as awareness of their adverse health effects has increased. Over the next decade, the decline is projected to continue, although at a slower pace.

Compared to other regions, Latin America is expected to account for the highest level of sugar consumption. Over the past fifteen years, high per capita consumption levels have raised concerns about their negative health effects. In response, several countries, including Chile, Colombia, Ecuador, Mexico, Peru, and more recently Brazil, have introduced a tax on sugar-sweetened beverages intended to reduce soft drink intake. Some countries such as Argentina, Brazil, Colombia, Mexico and Peru have implemented mandatory front-of-package labelling to promote healthier product choices. Over the next decade, the region is projected to experience a decline in per capita total caloric sweetener consumption, led by Brazil, Argentina, Paraguay, Chile, Mexico and Peru.

During the last decade, Europe had the highest per capita intake and the second highest total sugar consumption level. For the past two decades, European countries have sought to take measures to avoid excessive sugar consumption, prompting the industry to reformulate the composition of its products and consumers to gradually adopt healthier diets. Over the next ten years, the region will experience the biggest decline in consumption among the regions covered in the Outlook. Although per capita sugar consumption in the European Union will remain the highest in the region, it is expected to see a continuing decline over the next decade, albeit at a slower pace than in the previous decade, a trend also observed in the United Kingdom and Switzerland. Conversely, per capita sugar consumption is expected to increase in Ukraine and some other European countries.

Per capita consumption levels are also projected to decline in high sugar‑consuming countries such as Australia, New Zealand and Canada. However, this decline will be less visible in the United States as consumers will favour sugar-sweetened products over HFCS. In Japan and Korea,2 minimal changes are expected, except for the decrease in volume caused by population decline.

The High Fructose Corn Syrup market will stabilise

High Fructose Corn Syrup, the other caloric sweetener, is used primarily in beverages as a substitute for sugar. Unlike sugar, it is a liquid product and therefore less easily traded. Global consumption will remain the domain of a limited group of countries with no major changes. The largest producer, the United States, will remain the main consumer but the debate surrounding whether HFCS poses a greater potential health risk than does sugar is expected to continue, and the downward trend in consumption that started in the mid-2000s is expected to continue: by 2034, HFCS is foreseen to represent 33% of the caloric sweetener consumption compared to 35% during the base period. HFCS production in the United States is projected to decline slightly to 6.3 Mt. Mexico is the third largest consumer (behind China) and the efforts of the government to reduce caloric sweetener consumption are expected to continue over the next ten years, leading to lower intake of HFCS sweetened soft drinks.

China, the world’s second largest producer, is expected to see the biggest increase in consumption, although intake will remain low compared to Japan or Korea. Over the next decade, Chinese HFCS production is projected to increase and meet domestic demand (+0.2 Mt by 2034). No increase is foreseen in Japan and Korea with a consumption of about 5 kg/capita. In the European Union, HFCS will remain uncompetitive with sugar over the next decade, accounting for only one kg/capita in 2034.

4.3.2. Production

Sugar is a capital-intensive sector, characterized by substantial input costs, including energy to increase yield and sugar content. Remunerative domestic prices recorded in the early 2020s have encouraged investments in the sector and are expected to sustain further growth and development in the coming decade. Global sugar production is expected to increase by 15% over the Outlook period.

Global sugar production growth led by Asia

Global sugar production is expected to grow from 178 Mt during the base period to 205 Mt by 2034, 63% of which will come from Asia and 24% from Latin America.

Asia will become the leading region by 2034 producing about 42% of the world’s output. India, Thailand and China are expected to provide the largest shares of the region’s total sugar supply, increasing their sugar production by 8.7 Mt, 3.6 Mt and 2.0 Mt by 2034, respectively, compared to the base period (Figure 4.2). In India, the world’s second largest sugar producer, the growth rate in sugar production is expected to be slightly lower than in the past decade due to slower sugarcane production growth and greater diversion to ethanol. In Thailand, where sugarcane is primarily used to produce sugar, sugar production is projected to increase, driven by higher sugarcane production and improved sugar extraction rates. In China, the efforts of the domestic sugar industry will be supported by domestic production support policies aimed at stabilising output and reducing reliance on imports.

By 2034, Latin America is expected to be the second largest sugar producing region, with Brazil as the world’s leading supplier. Higher investments in plantations, combined with favourable weather conditions supported the recovery of the country’s sugar industry from a prolonged financial crisis between 2017 and 2022. However, following this recovery, persistent dry weather and unprecedented wildfires during the summer of 2024 are anticipated to affect sugar production at the start of the Outlook. Nevertheless, supported by investments and assuming normal weather conditions, production is projected to recover in the coming years, with an additional 5 Mt of sugar expected over the next decade compared to the base period.

Africa is also expected to contribute more to global sugar supplies, with its share of production increasing mainly on account of Sub-Saharan African countries, along with a rising contribution from Egypt, the continent’s largest sugar producer. Government support measures and foreign investments are expected to contribute to increased sugar production. Suitable conditions for growing sugarcane, potential for area expansion and lower costs of production, are expected to underpin the increase in production.

Production in OECD countries is foreseen to continue losing market share. In 2034, the region will represent 20% of the global market, compared to 22% in the base period. Although it will retain its position as the main producer of this regional market in 2034 (37%), the European Union's sugar production is expected to decline while higher supply is foreseen in the United States (+0.5 Mt) bolstered by several government policies that support the domestic industry.

Sugarcane to remain the main sugar crop, with growth driven by Brazil, Thailand and India

Sugarcane will continue to account for more than 85% of sugar crops. Over the Outlook period, global sugarcane production is projected to grow by 1.2% p.a. and reach 2 100 Mt by 2034. Brazil, India and Thailand are anticipated to contribute the most to the change in global output volume (+112 Mt, +90 Mt and +22 Mt, respectively). This mainly reflects relatively higher crop yields in India and Thailand, while area expansion is mainly expected in Brazil with an additional 1.2 Mha.

Brazil is the leading sugarcane producer, with half of its production used to produce ethanol. The allocation between the two is largely driven by market conditions, such as international sugar prices and domestic ethanol demand. However, government policies such as mandatory ethanol blending and incentives for biofuel production also play a key role in supporting ethanol use. The profitability of the sector in recent years, with high sugar prices, has encouraged investment in the sector. Over the next ten years, the adoption of more sustainable sugarcane cultivation practices is expected to enable the world's leading sugar exporter to meet market needs. Some area expansion is foreseen, and the share of area cultivated with sugarcane in total arable land availability (12.0% during the base period) will increase to 13% by 2034. Little improvement in yields is foreseen due to drier climatic conditions.

In India, the growth in sugarcane production is projected to stem mostly from higher crop yields, as area is not expected to expand given competition from other agricultural crops. Government support measures play a crucial role in sustaining sugarcane production. These measures include setting Fair and Remunerative Prices (FRP) to ensure farmers receive adequate compensation, providing financial assistance for the renovation of existing facilities, and supporting the development of improved sugarcane varieties. Additionally, the government collaborates closely with industry organisations, such as the Indian Sugar Mills Association (ISMA), to improve sugarcane yield and sugar recovery rates. Similarly, in Thailand, sugarcane production over the next decade is also expected to come mainly from higher yields, supported by government initiatives aimed at improving cultivation practices and sustainability. The cultivation area is anticipated to remain relatively stable, sustained by attractive farm-gate prices that incentivize farmers to continue sugarcane farming. In China, sugar crops floor prices set by the government and import tariffs will continue to provide incentives for authorities in the main producing regions to support farmers and millers in modernising and maximising their yields in the short term. However, only moderate growth is expected as rising input costs and competition for land with other crops will slow these efforts in the years to come.

Prospects are less robust for sugar beet. Transforming this crop requires more energy than the production of sugar from sugarcane and this negatively impacts profit margins. Increases in beet production are anticipated mainly in Egypt, Türkiye, the United States, and China.

In Egypt, remunerative procurement prices, along with efforts to adopt improved seed varieties and to expand sugar beet processing capacities are expected to boost sugar beet production by 4 Mt when compared to the base period.

In the United States and China, where both sugar crops are grown, higher sugar beet yields will enable this crop to maintain its market share of 52% and 9% of total sugar crops, respectively.

In Europe, not much change is expected in Ukraine and Russian Federation (hereafter “Russia”) over the next decade. While in the European Union, high input costs related to other crops, the spread of the reed glasswing cicada—which affects the sugar content of the beet in some areas - and stricter environmental legislation on plant protection products, which increases the risk of the spread of new disease outbreaks, will encourage producers to switch to more profitable crops. In Türkiye, the world’s fourth largest producer of sugar beet, after European Union, Russia and the United States, sustained yield increases over the past decade—driven by improved seed quality and modernized production practices—are expected to support further growth in sugar production over the next decade.

Sugar crops will primarily continue to be used for producing sugar or ethanol

During the last decade, 81% of the world’s sugar crops were used to produce sugar, but this share is expected to decline to 77% by 2034. In the major sugarcane producing countries, support for biofuel production will influence the balance between the main uses of sugarcane, sugar or ethanol, especially since factories often have the built-in option to switch from one to the other. By 2034, Brazil and India are expected to remain the main producers with respectively 37% and 23% of the world's sugarcane, 24% and 19% of global sugar production and 75% and 21% of global sugarcane-based ethanol production (Figure 4.3). In Thailand, very little ethanol is produced directly from sugarcane as molasses or cassava are mainly used.

Box 4.1. The role of the “Sugarcane Complex” in the bioenergy sector

Bioenergy is a renewable energy produced from various biomass sources, including wood, waste, and crops. Over the last decade, global energy production increased by about 14.5%, with bioenergy increasing by 18% during the same period and accounting for approximately 9% of the total energy supply by 2024. Among the different sources of bioenergy, fuelwood and vegetal residues make up about three-quarters of the total production, while bagasse and biofuels together account for around 15%. Bagasse is a cellulosic byproduct of sugarcane refinery, and while it is often regarded as waste, it can be used in producing cellulose-based products, feed and energy. Sugarcane juice and molasses are also used to produce ethanol through a fermentation process. The various sugarcane products and byproducts can be collectively termed as the "Sugarcane Complex" (SCC) and play an important role in the bioenergy sector.

The SCC is closely linked to the energy sector in major sugarcane producing countries like Brazil, India, and Thailand. Brazil’s energy sector has relied on the SCC to produce energy and over the last decade 50% of sugarcane has been used directly in ethanol production. This share is expected to remain stable over the next decade. In Thailand the direct use of sugar cane in biofuels is very limited (below 3%) and is not expected to change. Ethanol production uses about 9% of India's sugar production and it is expected to increase to 22% by 2034. The rising production of ethanol can be attributed largely to policies supporting the use of domestically produced ethanol, which couple biofuel consumption and fossil fuel consumption, aiming at decarbonizing the transport sector. Additionally, governments have provided various types of support to promote domestic ethanol production, such as tax credits and support prices for feedstocks (see Biofuel chapter).

In addition to sugarcane-based ethanol, molasses and bagasse significantly contribute to energy production from the SCC. Over the last decade, the SCC complex accounted for 10-16% of Brazil's energy production and is expected to be close to 11% by 2034. In Thailand, the SCC’s share in total energy supply increased from 7% to about 12% over the last decade, a figure that will remain constant by 2034. For India, the SCC’s share of the total energy supply will increase slightly to 4.5% by 2034. The projected SCC’s shares in energy production rely on the capacity of the countries to expand ethanol production and the domestic supply of bagasse. Assuming bioenergy from SCC grows more in line with sugarcane production projected in the OECD-FAO Agricultural Outlook, then total energy from the SCC would increase by 18% in Brazil, 48% in India and 30% in Thailand, indicating that SCC will remain a reliable and, in some cases, significant component of energy production.

Table 4.1. Selected indicators for the role of the Sugarcane Complex (SCC) in the energy sector

	Growth in total energy production		Growth in SCC energy production		SCC share in total energy production
	2012-14 to 2022-24	2022-24 to 2034	2012-14 to 2022-24	2022-24 to 2034	2012-14	2022-24	2034
Brazil	37.3%	21.2%	-6.2%	18.2%	16.3%	11.1%	10.8%
India	36.4%	30.6%	65.0%	48.4%	3.3%	4.0%	4.5%
Thailand	-2.7%	58.6%	32.6%	29.9%	7.4%	12.1%	12.1%

Source: Own calculations based on FAOSTAT bioenergy, IEA Energy Outlook 2024 and the OECD-FAO Agricultural Outlook.

From this perspective, sugarcane should be seen not only as a single product with a unique purpose but as a complex of several products meeting different needs, including food (sugar), feed (molasses and bagasse), cellulose production (bagasse), and energy (molasses, bagasse, and sugarcane juice). Being quite versatile, the SCC allows the sugar industry to diversify, thus providing more leverage to deal with uncertainties, i.e. ethanol may be used as a buffer when sugar prices are low.

The energy produced from the SCC in Brazil is nearly three times higher than the total energy consumption of the agricultural and forestry sector, and about four times higher in Thailand. In India, the surplus from SCC-based energy in relation to the energy consumption of the agricultural and forestry sector is nearly 27%.

In conclusion, the SCC has consolidated as a key element in ensuring a renewable and reliable source of energy, contributing to energy access and security.

Sources: FAO (2024), “Bioenergy 1990–2022”, FAOSTAT Analytical Briefs, No. 87, FAO Publications, Rome. IEA (2024), World Energy Outlook 2024, IEA Publications, Paris, https://www.iea.org/reports/world-energy-outlook-2024. FAO (2004), Unified Bioenergy Terminology (UBET), FAO Publications, Rome. Global Bioenergy Partnership (GBEP). 2024. Joint Statement on Sustainable bioenergy for climate and development goals, https://www.fao.org/climate-change/news/news-detail/sustainable-bioenergy-for-climate-and-development-goals/en.

4.3.3. Trade

Sugar trade to remain robust over the Outlook period

Sugar will remain a highly traded product. Most trade will continue to be represented by raw sugar (61% in 2034), which is typically transported in bulk form and will be destined for refineries (Figure 4.4). Trade in refined sugar intended for human consumption is more costly, since it requires greater protection against moisture and contamination during handling and transportation. The overall balance of raw and white sugar trade is expected to remain stable over the outlook period.

Imports are foreseen to account for 35% of global consumption over the Outlook period. Asia and Africa will remain the world’s largest gross importers, accounting for 58% and 29% respectively of global sugar imports. The growth in consumption in Least Developed Sub-Saharan African countries is expected to drive an increase in the share of imported white sugar for direct consumption. In Asia no significant changes are expected in terms of dependence on imports. Imports of raw sugar will continue to increase, mainly driven by key buyers, Indonesia and China, although China will reduce its dependency by 0.4 Mt.

By contrast, in Indonesia, the slow growth in sugar production coupled with a sustained increase in consumption, is expected to drive a significant increase in imports, which are projected to grow by 3% p.a. over the outlook period.

A continued decline in sugar imports, mainly white, is expected over the coming decade in the European Union, as well as in Japan where the decline will primarily affect raw sugar. The United States is traditionally a sugar-deficit country where national policies will continue to foster domestic production and limit import flows.

On the export side, sugar markets are projected to remain highly concentrated, making them reliant on market developments in a limited number of countries. By 2034, the traditional three main sugar exporters are anticipated to account for about three-quarters of the market: Brazil (73% of raw, 21% of white), Thailand (10% of raw, 20% of white), and India (2% of raw and 18% of white). Brazil will remain by far the world’s leading global supplier of raw sugar, and the main supplier of white sugar, along with Thailand and India. In India and Thailand, exports of white sugar are projected to maintain their larger share of total sugar exports, driven by higher returns from the white sugar premium. Australia will follow with about 7% of the raw sugar market.

At the start of the Outlook, Brazil is facing logistical bottlenecks at ports. Given the profitability of Brazil's exports in international markets and tightness in global sugar supplies, projects to develop storage, port and vessel infrastructures will continue. The lack of white supplies from Brazil, which prioritises raw exports at bulk terminals requiring fewer hygiene protocols, is expected to persist until 2034. Brazilian sugar exports are expected to increase by 5 Mt and reach 38 Mt in 2034, 21% of which will be white shipments compared to 14% during the base period.

Thailand’s share of sugar exports is expected to increase from 10.8% with a volume of 7.2 Mt in the base period to 14.3% and reach 10.4 Mt by 2034. In India, sugar exports are expected to reach 6.0 Mt by 2034, up from 4.7 Mt in the base period.

4.3.4. Prices

Sugar prices expected to fall in real terms

International sugar prices, in real terms, are projected to decline over the Outlook period, driven by sustained productivity gains, as described above. However, the downward pressure on prices is expected to be partially offset by constant real international crude oil prices, which would encourage the use of sugar crops for ethanol production, providing some price support for sugar.

Following a decline from recent high margins, the white sugar premium (difference between white and raw sugar prices) is anticipated to increase slightly in real terms over the Outlook period reflecting a tighter availability of white sugar in global exports relative to raw sugar.

4.4. Risks and uncertainties

Alternative national policy developments affecting the relative profitability of sugar crops or a change in returns compared to alternative crops could influence planting decisions.

Disturbances in trade routes, freight costs, port handling and storage, and the availability of shipping containers could significantly alter the market Outlook. Similarly, any deviation of the white sugar premium from the assumed increase in this Outlook could also affect country decisions on refining capacity and delivery strategies.

Given that 24% of global sugar crops are foreseen to be used for ethanol production in 2034 compared to 18% in the base period, including 52% of the domestic crop in Brazil, the fluctuation of crude oil vis-à-vis sugar relative prices remains a major source of uncertainty. Any further shifts in ethanol policy could have a significant impact on the global sugar market.

Increased investments in research and development particularly in diversification opportunities such as biofuels and bioplastics, could influence market dynamics and affect the availability of sugar for export.

Government initiatives, such as India’s National Bio-Energy Mission and Brazil’s RenovaBio programmes, are already driving investments in sustainable sugarcane practices. However, while these measures contribute to the sustainability of the sector, they may also lead to higher production costs than assumed, particularly if compliance requires additional investments in technology, inputs, or certification processes, potentially impacting sugar prices in both domestic and global markets.

Notes

← 1.  Caloric sweeteners include sugar and high fructose corn syrup (HFCS) in this chapter.

← 2.  For FAO, “Korea” refers to the “Republic of Korea”.