Thailand, one of the world's key sugar-producing regions, is expected to see its new crop season output fall by at least 17% due to drought conditions, adding further strain to an already tight global supply picture.

According to Rangsit Hiangrat, head of the Thai Sugar Millers Corp, production for the 2026-27 season, which begins this October, could drop below 10 million tonnes, compared with 12 million tonnes in the previous crop year. As the world's second-largest sugar exporter, Thailand's reduced output coincides with a strengthening El Ni帽o weather pattern, which typically brings dry conditions across large parts of South and Southeast Asia.

Supply concerns have already pushed raw sugar futures on New York's exchange higher, with prices climbing more than 20% last month, marking the biggest monthly gain since 2010. Hiangrat noted that Thailand's northeastern region, which accounts for roughly 45% of national output, has received significantly less rainfall this year compared with other domestic growing areas. Additionally, relatively high cassava prices could encourage local farmers to switch to planting that crop instead.

Meanwhile, India, another major sugar producer, has also seen below-average rainfall during its monsoon season, which ended this month. The International Sugar Organization projects a global supply deficit of around 260,000 tonnes for the new season, driven largely by El Ni帽o's impact on Asian harvests.

Data from the Thai Sugar Millers Corp shows that Thailand's sugar output peaked at over 14.5 million tonnes in both the 2017-18 and 2018-19 crop years. Hiangrat said production has since trended lower, typically hovering around 10 million tonnes, corresponding to roughly 90-100 million tonnes of cane crushed.