Sugar Futures at Over 1-Year Highs

US sugar futures eased to around 19.3 cents per pound, nearing their lowest since early October, pressured by a weaker Brazilian real and as the market consolidated following recent supply-driven gains. The devaluation of the real tends to favor Brazilian exports, as sellers can obtain more returns for each dollar received in foreign sales. Meanwhile, recent data showed that sugarcane crushing and sugar production in Brazil declined during the first half of October, as persistent rainfall across the Center-South disrupted harvesting and delayed mill operations. El Niño appears to be affecting the region earlier than expected, with excessive rainfall complicating production prospects and raising uncertainty over the start of the next harvest. Forecasts of further precipitation could prolong these disruptions, further limiting crushing activity and weighing on output. Lower production prospects in India and reduced planting in Europe are adding to concerns over global availability.

US sugar futures traded around 19.1 cents per pound, their lowest since early October, pressured by lower oil prices and a subdued Brazilian real following the presidential election results. The combination could encourage mills to favor sugar over ethanol and boost the competitiveness of Brazilian exports. On the supply side, improved weather in Brazil's key Center-South region has enabled sugarcane harvesting and milling to resume after recent rains disrupted operations, raising expectations of increased production. Recent UNICA data showed that cumulative cane crushing through August rose 1.8% year-on-year, while sugar production fell 10.3%, as mills allocated a larger share of cane to ethanol. Meanwhile, India, the world’s second-largest sugar producer, is expected to harvest a smaller crop than a year earlier after a powerful El Niño contributed to one of the weakest monsoons in more than a decade.

US sugar futures stayed above 20 cents per pound, close to their highest level since February 2025, amid persistent concerns over tightening supplies and support from elevated oil prices. In top producer Brazil, excessive rainfall linked to El Niño disrupted sugarcane harvesting and crushing operations in the key Center-South region, delaying the harvest and leaving volumes below initial forecasts. Meanwhile, India, the world’s second-largest sugar producer, faces a smaller crop than a year earlier after a powerful El Niño contributed to the weakest monsoon in more than a decade. Insufficient rainfall in key sugarcane-growing regions, particularly Maharashtra and Karnataka, has raised concerns over lower yields. Against this backdrop, the government ordered state-owned fuel retailers to stop procuring ethanol produced from sugar and key sugarcane-based feedstocks from November 1, potentially redirecting more sugarcane supplies towards sugar production.