Raw and white sugar futures on the ICE exchange climbed to their highest levels in more than a year on Thursday, driven by intensifying concerns over global supply. Raw sugar futures briefly touched 17.99 cents per pound, marking a new one-year high. White sugar futures also reached $564.40 per ton, a level not seen since March 2025.
One primary factor fueling these price increases is the potential for production cuts linked to El Niño weather patterns. Additionally, record domestic sugar prices in India, the world’s second-largest sugar producer, have sparked speculation that the country may soon become a sugar importer. To manage the elevated prices, the Indian government has already taken steps to limit inventories for bulk consumers to a maximum 15-day supply. Furthermore, concerns are rising over India’s declining sugarcane cultivation area and the likelihood of delayed crushing for the 2026/27 season due to insufficient rainfall.
Supply worries are compounded by a projected decline in Brazil’s sugar output. Conab, Brazil’s national crop agency, forecasts the country’s sugar production to fall by 2.9% to 42.9 million tons for the 2026/27 season. This reduction is largely attributed to mills diverting a greater portion of sugarcane towards ethanol production, a move incentivized by the Brazilian government through higher mandatory ethanol blending requirements.
The sharp rise in sugar futures prices is expected to increase costs for major sugar buyers, including food and beverage manufacturers. Several commodity forecasters have revised their 2026/27 global sugar balance from a surplus to a deficit in recent weeks. This shift in outlook suggests that the market anticipates continued tightness in sugar supplies, potentially leading to broader inflationary pressures on food prices.
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