**Sugar Prices Decline Amid Supply Concerns**
On Thursday, July NY world sugar #11 closed down 1.82% to settle at $14.57, while August London ICE white sugar #5 fell 1.21% to $17.40. This decline follows a sharp drop in gasoline prices, which have fallen over 8% in the last three sessions, reducing demand for ethanol and consequently impacting sugar pricing. According to Covrig Analytics, Brazilian sugar mills are already shifting production focus from ethanol back to sugar, as sugar is currently more profitable by 0.7 to 1 cent per pound.
Recent reports have indicated a tightening global sugar supply. Green Pool Commodity Specialists have adjusted their global sugar deficit estimate for 2026/27 from 1.66 million metric tons (MMT) to 4.30 MMT. Additionally, Unica reported an 11.9% year-over-year decrease in Brazil’s Center-South sugar production for the first half of April, forecasting a 0.5% decline in total sugar output for Brazil in 2026/27 to 43.95 MMT, while ethanol output is expected to rise by 7.2% to 29.26 million liters.
Concerns over the ongoing closure of the Strait of Hormuz are adding pressure to sugar prices, with about 6% of the world’s sugar trade being affected. The broader outlook indicates a potential surplus decrease globally, as estimated by Covrig Analytics, which revised the global sugar surplus for 2026/27 down to 800,000 MT from 1.4 MMT previously.
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