Sugar prices have climbed above 16 cents per pound, the highest level in ten months, as concerns over the global supply outlook intensify. Uncertainty among traders had already increased after Brazil suspended its biweekly harvest and production reports. That unease was reinforced by data released on August 6th showing that sugar output in June dropped 15% year-on-year. Unseasonably heavy rains associated with El Niño disrupted cane harvesting and milling, strengthening expectations of a global deficit in the 2026/27 season.
Market participants are closely watching Brazil’s sugar-ethanol mix, with nearly 58% of cane juice in June diverted to ethanol production. In late July, the country raised its mandatory ethanol blend in fuel to 32%, up from 30% a month earlier and 27% a year ago, a move that could further limit sugar availability.
At the same time, India is considering restricting the use of cane for ethanol from October and bringing forward the start of the crushing season to boost sugar supplies and rein in record-high prices. These measures come as demand strengthens ahead of the Indian festival season.