Sugar Futures Slip Amid Global Surplus

Sugar futures in the US have been trading around 14 US cents since late May, as supportive fundamentals from ample global supply keep prices subdued despite climate risks. At the same time, the announcement of a preliminary agreement to end the Middle East conflict and reopen the Strait of Hormuz improved the outlook for agricultural commodities, including sugar.. According to the consulting firm Covrig Analytics, the closure of the Strait of Hormuz restricted approximately 6% of the world's sugar trade. Oil prices also fell sharply, making ethanol less competitive and potentially prompting mills to shift more sugarcane to sugar production. However, concerns over the impact of an emerging El Niño pattern on key producing regions of Brazil and India limited the downside. Lastly, consulting firm Czarnikow has revised its global sugar balance, now forecasting a 100,000-ton deficit for 2026/27, compared with a prior estimate of a 1.4 million-ton surplus.

Sugar decreased to 13.86 USd/Lbs, the lowest since April 2026. Over the past 4 weeks, Sugar lost 6.95%, and in the last 12 months, it decreased 15.54%.

Sugar futures in the US eased to below 13.9 US cents, the lowest since April 22, partly influenced by falling oil prices and the ongoing weakness in the Brazilian real. The strong performance of the 2026/27 sugarcane harvest is also putting pressure on prices, due to increased supply and growing inventories. The Brazilian Sugarcane and Bioenergy Industry Association (UNICA) reported that sugar production in Brazil's Center-South region reached 2.475 million tons in April of the 2026/27 crop year, a volume 55.3% higher than that recorded in the same period of the previous cycle. Strength in Thailand’s sugar exports, the world’s second-largest, also reinforced the perception of a comfortable supply. However, concerns persisted about the potential impact of the El Niño weather phenomenon on the upcoming global sugarcane harvest, particularly in Brazil, India and Thailand.