Weather, more than price, is setting Brazil’s sugar output this season. Heavy rain across the Center-South over the past month has caused crushing stoppages and pushed mills to send more cane to ethanol, even when the sugar-ethanol parity pointed the other way. Wetter cane also carries more moisture and less sugar, which structurally favors ethanol. MAPA data for August showed the cane crush up 2.7% on the year at 100.3 million tonnes, while sugar output fell 6.3% to 7.1 million tonnes. For the season to the end of August, sugar output is down 10.7%.
The same rain could help next year. Estimates for the cane left standing in the fields, to be processed in 2027/28, range from 35 to 50 million tonnes. The previous record was 24 million tonnes in 2015/16, which was also an El Niño year. Vesper’s analysis sees the heavier rainfall as potentially supportive for 2027/28 supply, helping the global balance from the second quarter of 2027. In the nearer term, lower supply estimates for 2026/27, with more rain likely in the fourth quarter, have put a floor under prices into Q1.
India is moving the other way. The Government of Maharashtra has declared drought across large parts of the state’s cane belt, and drought conditions also exist in Karnataka. ISMA director general Deepak Ballani warned that India might not have much export potential in 2027 and that imports may be needed to keep domestic stocks sufficient. Whether those imports happen depends on domestic prices, which have weakened since the raw import quota was announced and currently make imports commercially unattractive.
On the exchanges, October No.11 raw sugar rose to 17.82 US cents per pound on 29 September, and December No.5 white sugar rose to $510 per tonne. CFTC data for the week to 22 September showed speculators trimmed their net long by 12,916 contracts to 92,615 lots, still a sizable bullish bet. With demand relatively weak, a further rally will depend on how much appetite funds have to add to that position.
Europe’s beet crop remains the other pressure point. JRC MARS now forecasts EU sugar beet yields 11% below the five-year average, and the French harvest could be the smallest since 1980. The full analysis covers how that divergence between regions is playing into EU pricing, and what the US beet and cane harvests look like going in.
