Sugar Hits 16-month High

Sugar increased to 18.31 USd/Lbs, the highest since April 2025. Over the past 4 weeks, Sugar gained 25.09%, and in the last 12 months, it increased 10.44%.

US sugar futures surged beyond 18 cents per pound, reaching the highest since April 2025, as traders amid persistent concerns over supply. Analysts have been revising their forecasts for a global sugar deficit in 2026/27, with the shortfall potentially widening further in 2027/28 as lower cane and beet plantings weigh on production. Climate risks in major producing regions and a potential shift toward ethanol production are adding to supply concerns, particularly in Brazil. Conab expects Brazilian sugar output to decline 2.9% to 42.89 million tonnes in 2026/27, while ethanol production is forecast to increase 9.7% to 29.98 billion litres. Meanwhile, the prospect of one of the strongest El Niño events in decades threatens production in key growing regions. Uncertainty over Indian purchases remains a key factor, while developments in the oil market could influence the balance between sugar and ethanol production.

US sugar futures hovered around 17.3 cents per pound, down from recent one-year highs, amid market correction and the pullback in oil prices. The prospect of lower Indian sugar imports than initially expected also weighed on prices. Greenleaf, an Indian sugar industry research firm, estimates that the country may import no more than 500,000 tonnes by October 31, half of the 1 million tonnes authorized duty-free by the Directorate General of Foreign Trade. However, the global sugar balance remains tight, with climate risks in major producing regions and a potential shift toward ethanol production adding to supply concerns, particularly in Brazil. Conab expects Brazilian sugarcane production to rise 4.7% to 705.2 million tonnes in 2026/27, but sugar output to fall 2.9% to 42.89 million tonnes, while ethanol production is forecast to increase 9.7% to 29.98 billion liters. A potentially strong El Niño could add further pressure on global output in the coming months.