FRUSTRATION WITHIN MEXICO’S SUGAR INDUSTRY IS GROWING Producers are urging Washington to remove restrictions and are threatening to pursue an anti-dumping case against US high-fructose corn syrup (HFCS) if negotiations fail. The dispute is likely to become a significant issue during the upcoming review of the USMCA trade agreement.


Ironically, the United States does not currently require large additional sugar imports from Mexico. Domestic sugar production has been relatively stable, and import requirements under existing tariff-rate quotas have largely been sufficient. Consequently, the volume left for Mexican exports remains limited despite Mexico's surplus production.


In Asia, China continues to exert a major influence on global sugar trade flows. Sugar imports during the first four months of 2026 increased by approximately 366,000 tonnes compared with the previous year, driven primarily by higher raw sugar purchases. Imports of liquid sweeteners and syrups also rose significantly.


HFCS CONTINUE TO EXPAND However, another trend is attracting growing attention. Chinese exports of liquid sugars, particularly HFCS, continue to expand. While growth has slowed compared with the exceptional increases recorded over the past two years, shipments are still rising and increasingly targeting markets such as Indonesia, the Philippines, Vietnam, South Korea, Malaysia, Taiwan and even Thailand.


This development matters because liquid sweeteners compete directly with traditional sugar consumption. As more imported HFCS enters these markets, local refiners may sell less sugar domestically, reducing demand for imported raw sugar and potentially reshaping regional trade patterns.


China’s own sugar production is also improving. As a result, raw sugar imports are expected to decline from approximately 4.9 million tonnes in 2025 to around 4.3–4.4 million tonnes in 2026. While China will remain a major importer, the trend points towards slightly lower import dependence.


BRAZIL (Supply-led) Production Corn ethanol


Demand Blend rate


+3.3 → 4.7bn L ethanol


9.2 → 11.3bn L +3.6% YoY 27% → 30%


Mexico (Trade-pressure) Surplus


+0.5 → 0.9m tonnes US exports (drop) 1m → 180k tonnes


Policy constraint US quotas / pricing rules


Market impact


Forced into lower- value markets


CHINA (Demand Shift) Imports (2026) HFCS exports Trend:


4.3–4.4m tonnes (↓ from 4.9m)


Rising across Asia


Substitution effect on sugar demand


INDIA (Balance-led) Production miss: -2 → -4m tonnes


Demand Stocks


~29m tonnes (↑ vs estimates)


~1.9m tonnes carryover


PAKISTAN (Policy-led) Stocks


Policy


<4 months by Oct (risk)


export vs price control tension


UNITED STATES (Stable) Ethanol output Corn use Demand


Source: AP Commodities


India remains one of the most closely watched markets. The arrival of the monsoon is critical, as sugarcane yields in key producing regions depend heavily on rainfall. Although planted area is expected to remain largely unchanged, sugar production during the 2025/26 season was estimated to be 2–4 million tonnes below earlier expectations due to weaker agricultural yields.


At the same time, domestic consumption appears stronger than official estimates suggest. While demand has been placed near 28 million tonnes, actual market deliveries indicate consumption could be closer to 29 million tonnes. Sugar exports


Slightly above YoY In line with forecasts Stable


exceeded 700,000 tonnes before government restrictions halted further shipments, but this remained well below the original quota allocation.


THE RESULT IS A TIGHT SUPPLY SITUATION Industry estimates suggest India could finish October with carryover stocks near 1.9 million tonnes — a relatively low level for a country of its size. Such conditions leave little room for production disappointments and may force policymakers to reduce sugar-based ethanol production if supplies tighten further.


Pakistan faces a similar balancing act. Sugar mills would like to export sugar to improve cash flow ahead of the next harvest, but the government remains concerned about domestic prices. Following a major import programme in 2025, policymakers are reluctant to risk another period of tight supply. Current stock levels appear adequate, but inventories could fall below four months of domestic consumption by October, limiting export opportunities.


Meanwhile, the United States ethanol sector remains stable. Production has been running slightly above year- ago levels, supported by steady corn consumption. Current trends suggest corn use for ethanol will remain close to official forecasts, giving little reason for major revisions in grain demand expectations.


Taken together, these developments suggest that in the short term, global sugar markets remain finely balanced. Brazil’s expanding ethanol sector, India’s tight stocks, China’s changing import requirements, and Mexico’s struggle to regain access to its largest export market all point to a year in which trade flows may shift significantly.


While no immediate supply crisis is visible, the margin for error appears narrow — and could change significantly depending on the weather.


Attention is required.


Alberto Peixoto E: albertopeixoto@apcommodities.london T: +44(0) 7570 714 981


24 | ADMISI - The Ghost In The Machine | Q2 Edition 2026


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