NY Sugar Futures Slip as Demand Signals Weaken

October NY world sugar #11 (SBV26) closed down 0.17 points, or 0.96%, on Thursday, while December London ICE white sugar #5 (SWZ26) rose 3.90 points, or 0.77%.

The mixed settlement reflected renewed demand concerns that weighed on New York prices. Open interest in the October NY sugar contract, which expires the following Wednesday, points to potential deliveries of around 1.8 million metric tons—above the six‑year average and a signal of weaker demand.

Additional pressure came from StoneX, which trimmed its 2026/27 global sugar deficit forecast to 900 000 t from a July estimate of 1.7 million t. Over the past week, NY sugar fell to a one‑month low and London sugar slipped to a 1.5‑month low.

Last Tuesday’s October London sugar contract saw deliveries of 499 350 t against the expired contract, a 91% year‑on‑year increase and one of the largest October deliveries on record, underscoring frail physical demand.

Commodity funds have heightened the risk of a squeeze. The latest Commitment of Traders report showed funds added 791 net long positions in NY sugar, lifting the total to 161 342—the highest level in nearly three years.

Market sentiment shifted sharply after the International Sugar Organization (ISO) projected a 200 000 t deficit for 2026/27, contrasting with a 1.1 million t surplus expected for 2025/26. Thai Sugar Millers Corp warned that Thailand’s 2026/27 crop could drop 17% year‑on‑year to 10 million t, while India announced a temporary tax‑free import allowance of up to 1 million t of raw sugar through October 31, highlighting supply constraints.

Production outlooks for key growers are mixed. Brazil’s Center‑South region saw June sugar output plunge 26.3% year‑on‑year to 3.903 million t, yet the USDA forecasts Brazil’s 2026/27 crop to decline only 3% to 42.5 million t. India’s 2026/27 production is expected to rise 12% to 33.6 million t, driven by favorable monsoons, while Thailand’s crop is projected to fall 15.6% to 9.5 million t.

El Niño conditions, forecast to be among the strongest in 75 years, threaten rainfall across Brazil, India and Thailand—the world’s three largest sugar‑producing regions. Analysts note that a super El Niño could further disrupt harvests.

Overall, the convergence of heightened open interest, large physical deliveries, and divergent production forecasts has shifted the market narrative from deficit‑driven bullishness to demand‑driven weakness, prompting the recent pullback in NY sugar futures.

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