Thailand’s sugar output may drop at least 17% in the coming season, adding to strain on global supplies as dryness hits major growers. Production is likely to fall below 10 million tons in the 2026-27 year starting in October, according to Rangsit Hiangrat, director of Thai Sugar Millers Corp. That compares with 12 million tons in the prior season. Thailand is the world’s second-largest sugar exporter, and the downturn coincides with strengthening El Niño, known for bringing dryness to South and Southeast Asia.

Supply risks have pushed New York sugar futures higher, with prices climbing more than 20% last month—the biggest jump since 2010. Rainfall in the northeast, which accounts for about 45% of Thailand’s total production, has been lower this year. Higher cassava prices may encourage farmers to switch crops.

In India, another major grower, monsoon rainfall has also trailed normal levels. The International Sugar Organization forecasts a global deficit of about 260,000 tons in the coming season, citing El Niño’s impact on Asian harvests. Thailand’s sugar output peaked at over 14.5 million tons in 2017-18 and 2018-19, per Thai Sugar Millers Corp data.

Production has since averaged about 10 million tons, derived from 90 to 100 million tons of sugarcane.