El Niño Threatens Asia Sugarcane Supply as Manufacturers Face Input Cost Risks
Monday, September 21st, 2026
Food and beverage manufacturers across Southeast Asia could face greater sugar supply and cost pressures as El Niño and extreme weather threaten sugarcane production across major Asian producing countries.
According to Malaysian media, prolonged drought, water shortages, pests and climate-related weather extremes are creating production risks in India, Thailand and the Philippines.
India is expected to experience an estimated 5% decline in sugarcane yields between October 2026 and September 2027. Sugar production is projected at around 28–29 million metric tonnes in 2026–27, compared with 30.6 million tonnes the previous year, excluding quantities diverted to ethanol production.
Thailand, the world’s second-largest sugar exporter after Brazil, is also expected to produce less than 10 million tonnes in 2026–27, compared with approximately 12 million tonnes in the previous season, according to the report.
The Philippines is facing similar challenges, with El Niño adding to existing pressures including pest damage, higher input and labour costs and reduced agricultural investment. The country’s sugar regulator projects production at around 1.7 million metric tonnes.
For ASEAN food and beverage manufacturers, the developments highlight the exposure of formulations and procurement strategies to climate-related agricultural disruptions.
Sugar is widely used across confectionery, beverages and snack products, meaning supply constraints can have direct implications for production costs and pricing. Seasonal demand may add further pressure, particularly ahead of major consumption periods.
Manufacturers could therefore benefit from closer monitoring of sugar markets, diversified sourcing strategies and formulation reviews where technically feasible.
The latest developments also reinforce the importance of building greater resilience into ingredient procurement as climate variability increasingly affects agricultural raw materials across Asia.
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