On Wednesday, October NY world sugar #11 (SBV26) closed up +0.03 (+0.17%) while December London ICE white sugar #5 (SWZ26) fell -2.30 (-0.44%). Sugar prices dropped to 1.5-week lows, pressured by weak physical demand, evidenced by the delivery of 499,350 MT of sugar against the October London contract, marking a 91% increase from last year’s 260,750 MT. This delivery is among the largest for October on record.
Recent forecasts indicate a looming global sugar deficit of -200,000 MT for the 2026/27 season, as projected by the International Sugar Organization (ISO), with production expected to decline by 1% to 180.1 MMT. In contrast, Brazil’s sugar production has decreased sharply due to a pivot towards ethanol, falling 26.3% in June from the previous year. Coupled with adverse weather conditions, recent data show India’s monsoon rainfall was 15% below normal this season, potentially affecting its status as the world’s second-largest sugar producer.
Commodity funds increased their long NY sugar positions by 28,055 net positions to a total of 160,551, the highest level in nearly three years. Market conditions are further complicated by expectations of a strong El Niño event impacting key sugar-producing regions like Brazil, India, and Thailand, leading to heightened volatility in sugar prices.
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