FX.co ★ Sugar Futures at Over 1-Week High

US sugar futures climbed above 14 cents per pound, the highest level in more than a week, driven primarily by stronger oil prices and expectations of lower output next season. Ongoing shipping disruptions linked to the Iran conflict have heightened oil price volatility, which could prompt mills to allocate more sugarcane to ethanol rather than sugar production.

From a fundamentals perspective, forecasts still point to a substantial global sugar surplus in 2025/26. However, as that season approaches its later stages, market focus is shifting to 2026/27, where analysts also anticipate a surplus, though a more modest one. Trading firm Czarnikow has sharply cut its estimate of the 2026/27 global sugar surplus to 1.1 million tonnes, down from 3.4 million tonnes in February, citing El Niño-related risks to cane output in India, Thailand, and Brazil.

At the same time, market participants are closely watching Brazil’s 2026/27 harvest, which began this month and is advancing steadily, supported by relatively dry weather across key producing regions.