Sugar Futures Slip Amid Global Surplus

Sugar futures in the US fell toward 14.5 US cents, easing from recent one-month highs of 15.5 US cents, partly influenced by movements in oil prices. Optimism over a potential US–Iran deal pushed crude oil prices lower, reducing incentives for mills to divert sugarcane into ethanol production and potentially increasing sugar supply. At the same time, the prospect of ample supplies weighed on prices. The USDA said India’s total sugar production in the 2026–27 season, starting in October, is expected to rise 12% to around 33.6 million tonnes from 30 million tonnes this year, driven by higher cane output driven by favourable crop conditions and improved recovery. Meanwhile, the global outlook is turning weaker. Consulting firm Green Pool Commodity Specialists recently revised its estimate of the global sugar deficit for the 2026/27 crop year, increasing it from 1.66 million to 4.30 million tons, reflecting the expectation of increased ethanol production amid still elevated oil prices.

Sugar futures in the US rose toward 15.2 US cents, the highest since early April, as traders weighed expectations of tighter global supply driven by a shift toward ethanol production. Green Pool raised its 2026/27 global sugar deficit forecast to 4.3 million metric tons from 1.66 million previously, citing elevated oil prices that are encouraging mills in top producer Brazil to divert cane crushing toward ethanol instead of sugar. Unica recently reported that sugar production in the Center-South region dropped 11.9% year-over-year during the first half of April, with mills significantly reducing the amount of cane allocated for sugar from 44.7% last year to just 32.9% in the current period. Ethanol production reached 1.23 billion liters, a 33.32% increase compared to the same period of the previous cycle. Policy support was also reinforced after President Luiz Inácio Lula da Silva confirmed an increase in the mandatory ethanol blend in gasoline to 32% from 30%.

Sugar increased to 15.07 USd/Lbs, the highest since April 2026. Over the past 4 weeks, Sugar gained 0.55%, and in the last 12 months, it decreased 13.63%.