Sugar Prices Plummet Amid Crude Oil Crash, El Niño Looms

Sugar prices have fallen to one-week lows due to plummeting crude oil prices. The October NY world sugar #11 (SBV26) price dropped by -0.21% and the October London ICE white sugar #5 (SWV26) price fell by -0.46%. The decline in crude oil prices has led to lower ethanol prices, causing sugar mills worldwide to consider diverting less cane crushing towards ethanol production and more towards sugar production.

This shift could increase sugar supplies, putting downward pressure on prices. However, concerns about the potential impact of an El Niño weather pattern on global sugar production have been a bullish factor for prices. The US Climate Prediction Center reported that the emerging El Niño is likely to be one of the strongest in over 75 years, which could curb rainfall in major sugar-producing regions such as Brazil, India, and Thailand.

Despite these concerns, some analysts are revising their forecasts downward. StoneX has raised its forecast for a global sugar deficit in 2026/27 from -550,000 MT to -1.7 MMT, while Covrig Analytics has cut its surplus forecast to 100,000 MT from 380,000 MT.