On October 8, sugar prices surged, with NY world sugar #11 (SBV26) rising by 0.07 cents (+0.46%) and Aug London ICE white sugar #5 (SWQ26) increasing by 5.10 cents (+1.07%). This spike comes as WTI crude oil prices climbed 7%, encouraging sugar mills to shift from producing sugar to ethanol, thereby potentially reducing sugar supply.
The NY sugar price has reached a 1.75-month high amid concerns over India’s weak monsoon rains, which are reported to be 15% below normal, potentially impacting the country’s sugarcane harvest. India’s weather office has warned of the weakest monsoon in 11 years. Additionally, Brazil’s Center-South sugar production has decreased by 2% year-on-year, with only 41.42% of sugarcane being utilized for sugar production as mills favor ethanol due to rising crude oil prices.
Forecasts indicate a possible decline in global sugar production for 2026/27, with estimates projecting a shortfall of 262,000 MT, attributed to El Niño weather patterns affecting key sugar-producing regions like India and Thailand.
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