Rising Global Sugar Prices Drive By Anticipated Deficit
October NY world sugar #11 (SBV26) is up +0.37 (+2.02%) today, and October London ICE white sugar #5 (SWV26) is +7.40 (+1.39%).
Sugar prices are sharply higher for a second consecutive trading session, with NY sugar hitting a 16.75‑month high and London sugar reaching a 1‑week high.
Prices are climbing on the prospect of a global sugar deficit.
On Tuesday, the International Sugar Organization (ISO) released a projection showing a 2026/27 global sugar deficit of -200,000 Mt, following expectations of a +1.1 MMT surplus for 2025/26.
Green Pool Commodity Specialists last Thursday foresaw a 2026/27 global sugar deficit of -3.2 MMT and lowered its global 2025/26 surplus estimate to 4.85 MMT from a July figure of 4.93 MMT. The European Union’s Sugar Market Observatory similarly reported on Thursday that EU 2026/27 sugar production is expected to dip -19% year‑on‑year to 13.4 MMT.
On August 3, Covrig Analytics revised its 2026/27 global sugar deficit expectation to -300,000 Mt, overturning a June outlook that had called for a +100,000 Mt surplus.
StoneX elevated its forecast to a 2026/27 global sugar deficit of -1.7 MMT on August 18 (up from a May estimate of -550,000 Mt) as rising crude oil prices affect Brazilian sugar mill capacity.
Excessive exposure among funds in London ICE white sugar could intensify liquidity pressures.
Last Friday’s weekly Commitment of Traders (COT) data revealed that funds heightened their London ICE white sugar long positions by 2,830 net longs in the week ending Aug 25, reaching a record 70,766—highest since 2011.
India’s Meteorological Department reported that cumulative monsoon rainfall (June‑Sept) was 13% below normal as of Sept 2, a significant improvement from a 42% shortfall on Jun 30.
Indian authorities have cautioned that this year’s monsoon may be the weakest in eleven years. India, already the world’s second‑largest sugar producer, faces mounting supply constraints.
In response to tightened conditions, India’s Directorate General of Foreign Trade indicated it will permit up to 1 MMT of raw sugar imports tax‑free until Oct 31—a measure reinforcing ongoing worldwide shortages.
The EU and U.K. are experiencing declining sugar output due to heatwaves and droughts, which the S&P Global Energy tracker predicts will bring production to 14.98 MMT this year—the lowest level in 11 years.
Czarnikow anticipates a 2027/28 global sugar deficit of -2.9 MMT, forecasting a -0.7% annual production decline to 177 MMT driven largely by downgrades in India, the EU, and Thailand.
Brazil’s output is moderating after Unica noted that Central‑South sugar production fell 26.3% year‑on‑year to 3.903 MMT on Aug 6, despite being the world’s largest sugar‑producing nation.
Weather volatility remains a catalyst; an emerging El Niño event threatens to reduce rainfall across Brazil, India, and Thailand—key producers covering roughly one‑third of global sugar supplies.
Key sectoral updates continue, including revisions by industry groups such as the Indian Sugar and Bio‑energy Manufacturers Association (ISMA), which adjusted its 2025/26 India production outlook to 32 MMT and projected exports of 800,000 MT in 2025/26. The USDA also issued forecasts for 2026/27, projecting a modest 182 MMT global production growth (+3.5% yy) but warning of a -200,000 Mt shortfall for 2026/27 due to El Niño impacts.
The Food and Agriculture Organization (USDA) reports that 2026/27 global sugar production will fall 6.5% to 184.9 MMT from the previous record high, driving total human consumption upward 0.4% to a historic 179.99 MMT. Ending stock levels are expected to rise 2.0% to 44.41 MMT, with Brazil’s output dipping -3.0% to 42.5 MMT and India’s growing by 12% to 33.6 MMT thanks to better rains and expanded acreage.
All information is provided for educational and informational purposes only. The author declares no financial interests in any securities referenced herein.
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