July NY world sugar #11 is down $0.29 (-2.13%), hitting a two-month low due to a 2% decline in crude oil prices, which undermines ethanol prices. This could lead to increased production of sugar over ethanol as millers respond to lower ethanol profitability. Concurrently, the reopening of the Strait of Hormuz is expected to alleviate global shipping costs and supply disruptions, further pressuring sugar prices.
Concerns about dry weather linked to a potential El Niño pattern—confirmed by Japan’s Meteorological Agency—could impact sugar production in Brazil, India, and Thailand, the world’s largest sugar producers. India’s meteorological department reported that monsoon rainfall is 38% below normal as of mid-June, with forecasts being revised down for the June to September season.
Recent reports indicate that Brazil’s sugar production for 2026/27 has fallen to 6.838 million metric tons (MMT), a 2% drop year-on-year, due to increased ethanol production. The percentage of sugarcane allocated to sugar production decreased from 50.09% to 41.42%. Simultaneously, the USDA forecasts a global sugar surplus of 2.5 MMT in India for the 2026/27 season, marking the first surplus in two years.
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