October NY World Sugar No. 11 futures (SBV26) fell 0.11, or 0.61%, while October London ICE White Sugar No. 5 futures (SWV26) declined 1.10, or 0.21%, during the session.
Sugar prices surrendered an early gain as the Brazilian real (^USDBRL) slipped to a 1.5-week low, prompting liquidation among long positions. A weaker real encourages Brazilian sugar producers to increase exports.
Prices initially rose after WTI crude oil (CLV26) jumped 2%. Higher crude prices support ethanol values and could lead sugar mills to allocate more cane to ethanol production and less to sugar, tightening available sugar supplies.
On Thursday, NY sugar reached a 17-month high, while London sugar climbed to a three-week high on expectations of a global deficit. The International Sugar Organization (ISO) forecast a 2026/27 deficit of 200,000 MT, compared with a projected 1.1 MMT surplus in 2025/26. The Thai Sugar Millers Corporation also estimated that Thailand’s 2026/27 production would fall 17% year over year to 10 MMT. Thailand is the world’s second-largest sugar exporter.
Covrig Analytics on August 3 revised its 2026/27 outlook to a 300,000 MT deficit, down from a June forecast of a 100,000 MT surplus. StoneX on July 28 raised its deficit estimate to 1.7 MMT from 550,000 MT in May, citing increased Brazilian ethanol production as crude oil prices surged following the U.S.-Iran war. On August 14, Czarnikow predicted a 2027/28 deficit of 2.9 MMT as lower sugar-cane and sugar-beet plantings weighed on supply. It forecast global production would decline 0.7% year over year to 177 MMT, mainly because of weather-related disruptions in India, the EU, and Thailand.
India’s Meteorological Department reported on September 9 that cumulative monsoon rainfall for June through September was 15% below normal, an improvement from 42% below normal on June 30. The Ministry of Earth Sciences warned that this year’s monsoon could be India’s weakest in 11 years. India is the world’s second-largest sugar producer.
On August 20, India’s Directorate General of Foreign Trade said it would permit up to 1 MMT of raw sugar imports without taxes through October 31. The policy underscores supply pressure in the global market; India is normally an exporter and last imported substantial volumes during the 2017-18 season.
Brazilian production declines are a supportive factor for sugar prices. Unica reported on August 6 that Center-South Brazil produced 3.903 MMT of sugar in June, down 26.3% from a year earlier. Brazil is the world’s largest sugar producer.
Concerns about dry conditions associated with El Niño are also supporting sugar prices. A super El Niño could reduce rainfall in Brazil, India, and Thailand, the three largest sugar-producing regions. The U.S. Climate Prediction Center said on July 8 that the pattern developing across the equatorial Pacific in June is likely to become one of the strongest in more than 75 years.
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) revised its 2025/26 India sugar output forecast to 32 MMT on April 7, down from 32.4 MMT previously. ISMA also forecasts exports of 800,000 MT. India introduced an export quota system in 2022/23 after late rains reduced output and tightened domestic supplies. On April 30, the USDA said it expected a 2.5 MMT surplus in 2026/27, the first in two years.
The International Sugar Organization (ISO) forecasts a record 2025/26 global crop and a surplus. It expects production of 182 MMT, up 3.5% year over year, and a surplus of 1.1 MMT, down from a May estimate of 2.2 MMT and a recovery from the 3.46 MMT deficit recorded in 2024/25.
For 2026/27, ISO forecasts production to fall 1% year over year to 180.1 MMT, creating a 200,000 MT deficit as El Niño could affect harvests in India and Thailand. StoneX raised its 2026/27 deficit forecast to 1.7 MMT on August 18 from a May estimate of 550,000 MT, while Covrig cut its surplus forecast to 100,000 MT from 380,000 MT in May.
In its May biannual report, the USDA projected global 2026/27 sugar production would decline 6.5% year over year to 184.854 MMT from a record 186.056 MMT in 2025/26. Human sugar consumption is expected to rise 0.4% to a record 179.991 MMT, while ending stocks are forecast to increase 2.0% to 44.410 MMT. USDA’s Foreign Agricultural Service (FAS) expects Brazil’s 2026/27 output to fall 3.0% to 42.5 MMT. It forecasts India’s production to grow 12% to 33.6 MMT, aided by favorable monsoon conditions and expanded acreage, and Thailand’s to decline 15.6% to 9.5 MMT.
