On July 10, sugar prices rose significantly, with July NY world sugar #11 increasing by +0.30 (+2.04%) and August London ICE white sugar #5 up by +7.00 (+1.62%). This spike is attributed to concerns over tightening global supplies, particularly due to Citigroup’s forecast that Brazil’s 2026/27 sugar production will plummet to 39.5 million metric tons (MMT), significantly lower than the 43.95 MMT projected by Conab.
The forecasted decline is linked to Brazilian mills prioritizing sugarcane allocation for ethanol due to rising gasoline prices. Additionally, potential strong El Niño conditions could further impact sugar production in India and Thailand over the next 6 to 12 months. Current global sugar trade is also affected by disruptions from the ongoing closure of the Strait of Hormuz, which has curtailed about 6% of this trade, thereby constraining refined sugar output.
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