NY Sugar Futures Climb as Brazilian Harvest Faces Weather Delays

October New York world sugar #11 (SBV26) futures closed up 0.16 cents (0.91%) on Wednesday, while December London ICE white sugar #5 (SWZ26) futures fell by 1.90 cents (-0.37%).

Sugar prices ended the session mixed on Wednesday, finding initial support from concerns that heavy rains are slowing Brazil’s sugarcane harvest. However, prices retreated from their peak levels, with London sugar falling into negative territory after StoneX revised its 2026/27 global sugar deficit estimate down to 900,000 metric tons (MT), down from a previous July estimate of 1.7 MMT.

On Tuesday, New York sugar hit a one-month low, and London sugar reached a 1.5-month low. Prices have faced downward pressure over the past week due to demand concerns. A total of 499,350 MT of sugar was delivered against the expiring October London sugar contract, a 91% year-on-year increase and one of the largest deliveries for an October contract on record, signaling weak physical demand.

Excessive long positions held by commodity funds could amplify any liquidation pressure in New York sugar futures. According to last Friday’s weekly Commitment of Traders (COT) report, funds increased their net long positions in New York sugar by 791 contracts in the week ending September 15, bringing the total to 161,342 contracts—the highest level in nearly three years.

New York sugar reached a 17.25-month high on September 10, driven by expectations of a global deficit. On September 1, the International Sugar Organization (ISO) projected a global sugar deficit of 200,000 MT for 2026/27, contrasting with a projected 1.1 MMT surplus for 2025/26. Additionally, the Thai Sugar Millers Corp projected on September 7 that Thailand’s 2026/27 sugar production could drop by 17% year-on-year to 10 MMT. As the world’s second-largest sugar exporter, Thailand’s production outlook is highly significant.

On August 3, Covrig Analytics revised its 2026/27 global sugar deficit expectation to 300,000 MT, down from a June forecast of a 100,000 MT surplus. Meanwhile, Czarnikow predicted on August 14 that the 2027/28 global sugar deficit could reach 2.9 MMT, as Brazilian mills shift production toward ethanol following a surge in crude oil prices due to the US-Iran conflict. The firm forecast that 2027/28 global sugar production would decline by 0.7% year-on-year to 177 MMT, primarily due to weather disruptions in India, the EU, and Thailand.

On Wednesday, India’s Meteorological Department reported that cumulative monsoon rainfall (June to September) was 15% below normal as of September 23, showing a substantial improvement from 42% below normal on June 30. However, the department warned that this year’s monsoon could be the weakest in 17 years. With the monsoon season running from June through September, these conditions pose a significant risk to India, the world’s second-largest sugar-producing nation.

On August 20, India’s Directorate General of Foreign Trade announced it would permit up to 1 MMT of raw sugar imports free of taxes until October 31. This policy shift highlights the mounting supply strain on the global sugar market, as India typically operates as a net exporter and last imported substantial volumes of sugar during the 2017-18 season.

Lower sugar output in Brazil provides a bullish backdrop for prices. According to a report on August 6 by Unica, Brazil’s Center-South June sugar production fell by 26.3% year-on-year to 3.903 MMT. As the world’s largest sugar producer, Brazil’s production figures are critical to global market dynamics.

Concerns regarding dry weather from an El Niño event continue to support sugar prices, as such patterns historically disrupt global agricultural output. A super El Niño is expected to curb rainfall in Brazil, India, and Thailand—the world’s three largest sugar-producing regions. On July 8, the US Climate Prediction Center stated that the El Niño pattern emerging in the equatorial Pacific was likely to be one of the strongest observed in over 75 years.

On April 7, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) lowered its 2025/26 India sugar production forecast to 32 MMT, down from an earlier estimate of 32.4 MMT. ISMA also projected Indian sugar exports for 2025/26 at 800,000 MT. India implemented an export quota system in 2022/23 after late rains reduced production and constrained domestic supplies. Meanwhile, the USDA projected on April 30 that India would face a sugar surplus of 2.5 MMT in 2026/27, marking the first surplus in two years.

The International Sugar Organization (ISO) forecasts a record global sugar crop for the 2025/26 season, accompanied by a global surplus. ISO projects 2025/26 global sugar production to reach a record 182 MMT, up 3.5% year-on-year, with a global surplus estimated at 1.1 MMT. This represents a downward revision from the May forecast of 2.2 MMT, but a significant rebound from the 3.46 MMT deficit recorded in 2024-25.

However, for the 2026/27 season, the ISO projects global sugar production to decline by 1% year-on-year to 180.1 MMT, resulting in a global deficit of 200,000 MT, citing potential El Niño impacts on harvests in India and Thailand. In line with this, StoneX raised its 2026/27 global sugar deficit forecast to 1.7 MMT on August 18, up from a May estimate of 550,000 MT. Conversely, Covrig Analytics adjusted its surplus forecast down to 100,000 MT from a previous May estimate of 380,000 MT.

In its biannual report released in May, the USDA projected that global 2026/27 sugar production would fall by 6.5% year-on-year to 184.854 MMT, down from a record 186.056 MMT in 2025/26. Global human sugar consumption for 2026/27 is expected to rise by 0.4% year-on-year to a record 179.991 MMT. The USDA also projected that global sugar ending stocks for 2026/27 would increase by 2.0% year-on-year to 44.410 MMT. Additionally, the USDA’s Foreign Agricultural Service (FAS) predicted that Brazil’s 2026/27 sugar production would decrease by 3.0% year-on-year to 42.5 MMT. FAS forecasts that India’s 2026/27 sugar production would increase by 12% year-on-year to 33.6 MMT, supported by favorable monsoon rains and expanded sugar acreage. In contrast, Thailand’s 2026/27 sugar production is predicted to fall by 15.6% year-on-year to 9.5 MMT.

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