Sugar Futures at Over 1-Month Low

Sugar futures in the US eased toward 14.7 US cents, the lowest in over a week, pressured by expectations of robust Brazilian supply. According to StoneX, the Central-South region, the country's main sugarcane producing hub, is expected to register the second largest harvest in history in the 2026/27 season, which began in April, amid better weather conditions compared to last year. The consulting firm estimates a milling volume of 632.2 million tons, above the forecast released in March of 620.5 million tons, and also higher than the volume of the 2025/26 harvest, which was 621.9 million tons. However, forecasts from multiple consulting firms pointing to a global deficit in the 2026/27 crop, along with India’s decision to ban sugar exports for at least four months due to supply concerns, limited the downside. The market also remained attentive to climate risks, including the El Nino phenomenon, and oil price volatility, which continues to directly affect the sugar and ethanol sectors.

Sugar futures in the US rose to 15.4 US cents, moving back to a more than one-month high on expectations of reduced output. The USDA’s May WASDE report revised down 2025/26 sugar production due to weak beet sugar recovery, partly offset by higher raw sugar imports, while overall use remained unchanged. For 2026/27, both beet and cane sugar production are expected to decline, with beet production pressured by reduced planted area and lower yields, and cane production affected by a winter freeze in Florida that damaged earlier plantings. Recently, Green Pool Commodity Specialists raised its estimate of the global sugar deficit for 2026/27 crop year from 1.66 million to 4.30 million tons, reflecting expectations of increased ethanol production amid persistently elevated oil prices.

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.