Sugar prices surged to five-month highs this week, with May NY world sugar #11 (SBK26) closing up 3.85% and May London ICE white sugar #5 (SWK26) rising 3.16%. This rally is largely driven by soaring gasoline prices, which have reached a 3.5-year high, boosting ethanol prices and incentivizing sugar mills to pivot towards ethanol production. Additionally, supply disruptions due to the closure of the Strait of Hormuz have constrained refined sugar output, impacting approximately 6% of global sugar trade.
Despite the current price increase, analysts remain cautious about future supply, forecasting a global sugar surplus of 3.4 million metric tons (MMT) for the 2026/27 crop year. Notably, India’s recent approval for additional sugar exports could further pressure prices, as the country is expected to increase production significantly.
Market professionals should closely monitor these dynamics, as the interplay between ethanol demand and global production forecasts could lead to volatility in sugar prices. For a deeper dive into these trends, I recommend checking out the full article.
Source: nasdaq.com