Raw sugar futures rose 3.8% over the past week to trade above 15 cents/lb, with the October ICE No.11 contract at $15.04 and October white sugar No.5 up to $473/mt. The gains came as speculation over the timing and size of Indian sugar imports supported the bulls, though the peak of Brazil’s cane harvest kept a lid on how far prices could run.
The bigger driver is weather. The World Meteorological Organization says El Niño is intensifying and will dominate global climate patterns through October, and UN Secretary-General António Guterres put it bluntly: “it is inside the house and turning up the heat.” In Brazil, persistent rain that markets initially read as a boost to later-season yields is now increasingly seen as a drag on harvest activity, with Center-South cane crushing down 28.4% year on year in the second half of June and sugar output down 44.2%. In Europe, hot and dry conditions are pressuring beet yields just as the European Commission projects 2026/27 output falling 15% year on year on smaller planted area and lower yields; the EU’s own crop monitor cut its beet yield forecast again this month, with France hit hardest by heat stress. India and Thailand face their own weather risks, and Indian domestic sugar prices have already climbed 17% as authorities weigh cutting how much cane gets diverted to ethanol to protect supply.
In the US, the picture is similarly tight. The USDA’s July WASDE update trimmed its 2026/27 sugar output estimate on a smaller expected beet harvest area, a shortfall the agency expects to pull in higher imports to hold its target stocks-to-use ratio. Louisiana cane growers are also contending with a mealybug outbreak, though the scale of crop losses isn’t yet clear.
Global 2026/27 balance forecasts still span a wide range, from a modest 300,000-tonne deficit to more than 3 million tonnes, but the direction of travel across every major producing region now points the same way: tighter. Futures market positioning reflects some caution regardless, with funds adding to net short positions in the week to 28 July even as physical fundamentals firm.
This news article is part of a broader Vesper market analysis on the global sugar market. For the full market analysis, visit: https://app.vespertool.com/market-analysis/3299
