On October 10, 2023, sugar prices saw an uptick, with May NY world sugar #11 rising by $0.07 (0.52%) and August London ICE white sugar #5 increasing by $1.20 (0.28%). This market movement follows a surge in crude oil prices, which rose over 3%, potentially causing sugar mills to shift more production towards ethanol, limiting sugar supply.
Key forecasts highlight a decrease in Brazilian sugar output, projected by the USDA to reach 42.5 million metric tons (MMT) for 2026/27, a 3% decline year-on-year, as millers prioritize ethanol over sugar production. Additionally, Covrig Analytics reduced its global sugar surplus estimate for 2026/27 to 800,000 MT from 1.4 million MT, further influencing market prices.
Concerns over supply disruptions, particularly from the closure of the Strait of Hormuz—which reportedly affects 6% of global sugar trade—are also contributing to price support. India’s sugar production is forecasted to increase to 29.3 MMT in 2025/26, while both the USDA and International Sugar Organization anticipate an overall rise in global sugar production, suggesting a complex interplay of factors driving current price movements.
