October NY world sugar #11 (SBV26) rose by 3.25% to $14.91, while October London ICE white sugar #5 (SWV26) increased 3.67% to $470.40. This surge follows a sharp rise in WTI crude oil, which is up over 3% to a one-month high, prompting concerns that sugar mills may shift production from sugar to ethanol, potentially reducing sugar supplies.
In recent weeks, sugar prices experienced volatility due to fluctuating weather patterns, particularly concerning India’s monsoon, which has been reported 24% below normal as of July 17. The US Climate Prediction Center indicates that a significant El Niño event may disrupt rainfall in major sugar-producing regions including Brazil, India, and Thailand. Furthermore, Brazil’s sugar production is projected to drop as millers increasingly prioritize ethanol production over sugar, contributing to a tightening global sugar balance, with potential deficits forecasted for the 2026/27 season.
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