FX.co ★ Sugar Futures at Near 2-Month High

Sugar futures in the US climbed above 14.7 cents per pound, the highest level since late January, as prices remained highly responsive to movements in the oil market. Rising oil prices amid the Middle East crisis have made ethanol production more attractive, encouraging mills to divert a greater share of sugarcane toward biofuel and away from sugar.

In Brazil, the world’s leading sugar producer, ethanol output in the 2026/27 season is projected to increase by about 4 billion liters from the previous year, reaching a record level, according to industry sources. At the same time, expectations of ample supply—driven mainly by India and Brazil—continue to underpin the broader market outlook.

However, recent Reuters forecasts point to a shift in the global balance: from a surplus of 1.39 million tons in 2025/26 to a deficit of 1.5 million tons in 2026/27. This turn is largely attributed to anticipated changes in how India and Brazil allocate sugarcane between sugar and ethanol production.