**Sugar Prices Decline Amid Crude Oil Drop and Production Concerns**
On October 6, 2023, October NY world sugar #11 closed down $0.58 (-3.10%) and October London ICE white sugar #5 fell $15.20 (-2.82%). The decline in sugar prices is attributed to a more than 2% decrease in WTI crude oil prices, which fell from a three-and-a-half-month high. Lower crude oil prices typically reduce ethanol prices, incentivizing sugar mills to produce more sugar rather than ethanol, potentially increasing sugar supply.
Production forecasts for 2026/27 are concerning, particularly from Thailand, where sugar production is expected to drop by 17% year-on-year to 10 million metric tons (MMT), according to the Thai Sugar Millers Corp. Correspondingly, the International Sugar Organization (ISO) has projected a global sugar deficit of 200,000 metric tons for 2026/27, a stark contrast to a projected surplus of 1.1 MMT for 2025/26. Brazil’s June sugar production also fell by 26.3% year-on-year to 3.903 MMT, further straining global supplies.
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