On July 4, 2023, sugar prices rose, with July NY world sugar #11 closing up by $0.05 (+0.35%), marking a six-week high, driven predominantly by fears of reduced sugarcane harvests in India due to weak monsoon rains. The Indian Meteorological Department reported cumulative rainfall 42% below normal as of June 29, with warnings of the weakest monsoon in 11 years.
Additionally, Brazil’s sugar production is forecasted to decline by 2% year-on-year, dropping to 6.838 million metric tons (MMT) as a result of increased ethanol production, which utilized 58.38% of sugarcane this season. Global sugar balances are also shifting; trader Czarnikow reduced its global 2026/27 sugar surplus estimate from 1.4 MMT to a deficit of 100,000 MT amid a surge in ethanol production.
Compounding these concerns, the U.S. National Oceanic and Atmospheric Administration indicates a 67% probability of a “Super El Niño” this year, which could further disrupt rainfall in major sugar-producing regions, including India, Brazil, and Thailand.
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