Sugar Futures at Over 2-Week High

Sugar futures in the US extended gains, rising above 14.1 cents per pound to the highest in over two weeks, driven in part by a stronger Brazilian real that discourages Brazilian exports and ease pressure on global prices. Recent reports of lower-than-expected production in India, where excessive rain has reduced cane yields, have also helped underpin prices. Reuters cited internal estimates from five trade houses, which put India’s 2025/26 sugar production at 28.5–29 million metric tons, compared with ISMA’s forecast of 30.95 million earlier this month. Meanwhile, the US Supreme Court’s decision to overturn Trump-era tariffs could open the door for higher Brazilian sugar exports to the US, with potential implications for global supply. Brokers see signs that the prolonged price decline may be over, but abundant global supply is expected to limit a strong short-term recovery.

Sugar futures in the US rose slightly to around 13.7 cents per pound, the highest since February 10, as the market consolidates following last week’s 2020-year lows, partly due to short-covering. The recent decline in prices has made the commodity attractive to individual buyers, triggering a wave of pent-up demand. Asian exporters reported increased purchasing flows, driven by the need for post-Ramadan restocking. Meanwhile, indications that India’s crop may be smaller than previously expected added further support. Despite the slight bounce, the upside potential for prices remains constrained by strong oversupply fundamentals. Czarnikow projected global surpluses of 8.3 million tons in 2025/26 and 3.4 million tons in 2026/27, while Green Pool and StoneX estimated 2.7–2.9 million tons for the current cycle. The scenario of abundance is reinforced by Brazilian data. Sugar production in Brazil’s Center-South reached 40.236 million tons by mid-January, up 0.9% from the previous harvest.

Sugar futures in the US eased to around 13.5 cents per pound, the lowest since September 2020, as the market remains pressured by oversupply due to good growing conditions for sugarcane and sugar beet in several producing regions. The prospect of a large global surplus in the 2025/26 crop year keeps the pressure on prices, with increased production in India and Thailand, particularly of white sugar, while global consumption is expected to remain stable. Market observers expect another surplus in the 2026/27 season, albeit smaller, as top producer Brazil is expected to have a bumper harvest. Copersucar expects Brazil's sugarcane harvest to increase to 620 million tons, up from 608 million tons in the current season.