Sugar Prices Surge Amid Forecasts of Global Production Decline

Sugar prices have surged to a 15-month high on forecasts of a decline in global production due to the El Niño phenomenon and low sugar prices. The world is expected to face a deficit of 0.3-3.3 million tons in the 2026/27 crop year, up from a surplus of 1-5 million tons previously predicted.

The Trading company Czarnikow has downgraded its estimate of the world sugar balance for 2026/27 MY from a surplus of 1.4 million tons to a deficit of 100 thousand tons. Experts from StoneX, Green Pool Commodity Specialists, and Covrig Analytics predict deficits ranging from 0.55 to 3.3 million tons.

The rise in sugar prices is attributed to dry conditions due to El Niño and increased volumes of sugarcane processing into ethanol amid rising oil prices. October futures for white sugar No. 5 on the London Stock Exchange rose 15% in a month to a 15-month high of $539.5/t, while cane sugar No. 11 in New York reached a 16-month high of $385/t.