Sugar prices rose on Tuesday, with July NY world sugar #11 closing up 0.67% and August London ICE white sugar #5 up 1.02%. This uptick is attributed to forecasts of tighter global supplies, as StoneX predicts a shift from a surplus of 2.3 million metric tons in the 2025/26 season to a deficit of 550,000 metric tons in 2026/27. Contributing factors include Brazilian mills prioritizing sugarcane for ethanol production amid rising gasoline prices and potential disruptions from a strong El Niño impacting production in key regions like India and Thailand.
The implications for the sugar market are significant, particularly as Brazil’s sugar production estimates are being revised downward. Citigroup’s projection of 39.5 million metric tons for Brazil’s 2026/27 production is notably lower than previous estimates, which could lead to increased volatility in sugar prices. Moreover, the ongoing closure of the Strait of Hormuz is constraining global sugar trade, further tightening supply.
Market professionals should monitor these developments closely, as the combination of reduced production forecasts and supply chain disruptions suggests a bullish outlook for sugar prices in the near term.
Source: nasdaq.com