October NY World Sugar #11 (SBV26) is down -0.04 (-0.27%) today, and October London ICE White Sugar #5 (SWV26) is down -5.00 (-1.08%).
Sugar prices are lower today due to a stronger dollar and the possibility of improvement in sugar production in India as monsoon rains continue to improve. India’s meteorological department reported on Wednesday that India’s cumulative monsoon rainfall till July 22 was 19% below normal, down from 42% below normal as of June 30.
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Sugar has underlying support with WTI Crude Oil (CLQ26) rising by over +6% today. The rise in oil prices is bullish for ethanol prices, which may encourage sugar mills across the world to shift more cane crushing towards ethanol production instead of sugar, thereby curbing sugar supplies.
Excessive long positions in London ICE Sugar by funds could magnify any price declines. Last Friday’s Weekly Commitment of Traders (COT) data showed that funds increased their long positions in ICE London White Sugar by +716 to a record 58,847 net-long positions (data from 2011) in the week ending July 14.
Sugar prices have risen sharply over the past month, with New York sugar reaching a 2.25-month near futures high on July 8 and London sugar reaching a 10.5-month high on July 7. Sugar prices have risen amid concerns that weak monsoon rains in India will reduce sugar production and reduce the sugarcane crop in the country, the world’s second-largest. India’s Ministry of Earth Sciences has warned that this year’s monsoon in India could be the weakest in 11 years. The monsoon season in India runs from June to September.
Concerns that dry weather due to the El Nino phenomenon could disrupt global sugar production are driving up prices. The emergence of El Nino is likely to curb rainfall in Brazil, India and Thailand, the world’s three largest sugar producing regions. On July 8, the US Climate Prediction Center said the El Niño weather pattern that emerged in the equatorial Pacific last month would likely be one of the strongest in more than 75 years. India’s weather office recently last Friday cut its cumulative rainfall forecast for the June-September monsoon season to 90% of the long-term average, down from a forecast of 92% issued in April.
As a bullish factor, Unica reported on June 22 that 2026/27 Brazil Centre-South sugar production through May stood at 6.838 MMT, down -2.0% year-on-year as mills increased ethanol production. The percentage of cane used for sugar by Brazilian sugar mills decreased from 50.09% to 41.42%, as cane crushing for ethanol production increased to 58.38% from 49.91% the previous year. Additionally, sugar trader Jarnico on June 11 cut its global 2026/27 sugar balance estimate from a surplus of 1.4 MMT to a deficit of -100,000 MT as Brazilian sugar mills produce more ethanol than sugar amid the recent surge in crude oil prices.
On April 28, Conab forecast in its preliminary report for the new sugar season that 2026/27 Brazilian sugar production would decline -0.5% to 43.952 MMT, while ethanol production would increase +7.2% y/y to 29.259 million liters.
On April 7, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) revised its 2025/26 India sugar production forecast to 32 MMT, down from the earlier estimate of 32.4 MMT. ISMA also estimates India’s sugar exports at 800,000 metric tonnes in 2025/26. India introduced a quota system for sugar exports in 2022/23 after late rains reduced production and limited domestic supplies. Meanwhile, the USDA on April 30 said it expects a 2026/27 sugar surplus in India of 2.5 MMT, the first surplus in two years.
On May 18, the International Sugar Organization (ISO) predicted a record global sugar harvest for the 2025/26 season and raised its global surplus estimate. ISO forecasts global sugar production in 2025/26 to be a record 182 MMT, up +3.5% year-on-year, and raised its 2025/26 global sugar surplus forecast to 2.2 MMT from a February forecast of 1.22 MMT, down from a deficit of -3.46 MMT in 2024-25.
However, for 2026/27, ISO estimates that global sugar production will decline -1.15% per year to 180 MMT, and the global sugar deficit will be -262,000 MT, citing the potential impact of the El Niño weather pattern on the crop in India and Thailand. For 2026/27, StoneX had forecast a deficit of -550,000 MT on May 20, while Kovrig Analytics cut its surplus forecast to -100,000 MT from May’s estimate of 380,000 MT.
In its biennial report released in May, the USDA projected that global 2026/27 sugar production would decline 6.5% to 184.854 MMT from a record 186.056 MMT in 2025/26. Global 2026/27 human sugar consumption is expected to increase +0.4% y/y to a record 179.991 MMT. USDA also forecasts 2026/27 global sugar ending stocks to increase 2.0% y/y to 44.410 MMT. USDA’s Foreign Agricultural Service (FAS) forecasts Brazil’s 2026/27 sugar production to fall -3.0% y/y to 42.5 MMT. FAS predicts India’s 2026/27 sugar production to increase +12% y/y to 33.6 MMT, driven by favorable monsoon rains and increase in sugar acreage. FAS predicts Thailand’s 2026/76 sugar production will fall -15.6% y/y to 9.5 MMT.
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