Sugar Futures Slip Amid Global Surplus

Sugar futures in the US eased further to trade slightly below 14.3 cents per pound, down from recent one-month highs of 14.6 per pound, pressured by ample global supply, which helped temper recent volatility from oil price swings driven by geopolitical tensions. The consulting firm Hedgepoint noted that the 2025/26 season continues to point to an oversupplied market, supported by strong Brazilian production and expectations of Northern Hemisphere recovery. Meanwhile, market fundamentals show that while global sugar supply still exceeds demand, the margin is narrowing. Broker StoneX cut its forecast for a global sugar surplus in the current 2025/26 season to just 870,000 tons from 2.9 million tons, driven by India’s reduced harvest and shifts in Brazil’s production patterns.

Sugar futures in the US eased to near 14.3 cents per pound, down from one-month highs of 14.6 hit on March 9, amid a pullback in oil prices amid hopes of a swift end to the Middle East crisis. President Trump said in an interview with CBS News that he thought the war against Iran was "very complete" and that Washington was "way ahead" of its initial estimated timeframe of four to five weeks. This alleviated fears that sugar mills worldwide, particularly in top producer Brazil, might divert more sugarcane to ethanol production, potentially limiting sugar output. Most ethanol in Brazil is made from sugarcane, meaning increased cane allocation for the biofuel would reduce the raw material available to produce the sweetener. Meanwhile, a Reuters poll recently indicated sugar prices are expected to end the year about 10% above current levels, amid an anticipated shift in the global market from a surplus of 1.39 million tons in 2025/26 to a 1.5 million ton deficit in 2026/27.

Sugar futures in the US climbed above 14.5 cents per pound to the highest since early February, supported by surging oil prices and forecasts of lower global supply. The ongoing Middle East crisis has pushed oil prices higher, boosting ethanol profitability and raising concerns that sugar mills, especially in top producer Brazil, may divert more cane toward ethanol production, thus curbing sugar supplies. Meanwhile, a Reuters poll on March 6 indicated sugar prices are expected to end the year about 10% above current levels, amid an anticipated shift in the global market from a surplus of 1.39 million tons in 2025/26 to a 1.5 million ton deficit in 2026/27. The expectation is that production in the key Center-South region of Brazil will reach 40.38 million tons in the cycle, a volume close to the previous season, but with a smaller proportion of sugarcane destined for sugar production.