On Thursday, May NY world sugar #11 (SBK26) closed up $0.03 at $13.85 per pound, while August London ICE white sugar #5 (SWQ26) rose by $3.80 to $424.50 per metric ton, marking a two-week high. The increase in sugar prices is attributed to rising crude oil prices, which rose over 3%, potentially leading sugar mills to divert cane production from sugar to ethanol.
Strength in the Brazilian real, which reached a two-year high against the dollar, is also supporting sugar prices as it discourages exports. The USDA projects Brazil’s sugar production for 2026/27 at 42.5 million metric tons, a decrease of 3% year-on-year due to an increased focus on ethanol production. Covrig Analytics has revised the 2026/27 global sugar surplus estimate down to 800,000 metric tons from 1.4 million metric tons previously, indicating tighter global supplies.
Concerns over supply disruptions from the closure of the Strait of Hormuz, which has impacted approximately 6% of the world’s sugar trade, further support prices. The market has faced pressure recently, with NY sugar futures reaching a 5.5-year low last week amidst expectations of abundant global supplies and weak demand.
