**Sugar Market Update: October Prices Rise Amid Varying Factors**
On October 6, 2023, sugar prices saw a slight increase with October NY world sugar #11 closing up 0.08 cents (+0.54%) and October London ICE white sugar #5 rising by 1.00 cent (+0.22%). This uptick occurred against a backdrop of a weaker dollar and short-covering before the weekend, following a week of low prices.
Factors influencing the market include a notable decline in WTI crude oil prices by over 3%, which affects ethanol production and consequently sugar supplies, as mills may pivot away from ethanol production. Additionally, India’s improving monsoon, with rainfall reported 19% below normal as of July 22, raises prospects for increased sugar output. The emergence of an El Niño weather pattern, projected to disrupt rainfall in major sugar-producing countries like Brazil, India, and Thailand, poses a potential risk to future sugar production, which could support prices in the long term.
Global sugar production forecasts for 2026/27 anticipate a drop to 180 million metric tons (MMT), amid predictions of a deficit of 262,000 MT, influenced by adverse weather patterns. The USDA anticipates that Brazil’s sugar output will decrease by 3% to 42.5 MMT, while India’s output is expected to rise by 12% to 33.6 MMT.
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