FX.co ★ Sugar Remains Subdued as Global Supply Outlook Weighs

Sugar prices have been trading below 15 cents per pound, holding more than 10% under year-ago levels, as expectations of ample global supply continue to outweigh emerging production risks. The primary bearish driver is India, where improved monsoon rains have brightened prospects for a larger sugar crop, while government limits on stockholdings are designed to ensure sufficient domestic availability.

Weaker crude oil prices have added further pressure, as lower ethanol prices encourage mills—especially in Brazil—to allocate more sugarcane to sugar rather than ethanol, boosting exportable supply. Nonetheless, the downside has been partially cushioned by projections of a global sugar deficit in 2026/27, driven by anticipated lower output in Brazil and Thailand and the potential impact of a strengthening El Niño on key producing regions. At the same time, the USDA has revised U.S. sugar stocks lower after data corrections and now forecasts tighter domestic supplies.