July NY world sugar #11 (SBN26) today is up +0.11 (+0.80%), and Aug London ICE white sugar #5 (SWQ26) is up +6.40 (+1.45%).
Sugar prices erased early losses today and moved higher on concerns over India’s sugar crop. India’s Meteorological Department reported that India’s cumulative monsoon rainfall was 32% below normal as of June 15. India’s monsoon season runs from June through September.
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Earlier today, sugar prices initially moved lower with NY sugar falling to a 1.75-month low amid a plunge in crude oil prices. WTI crude oil (CLN26) tumbled more than -5% today to a 3.5-month low, which undercuts ethanol prices and may prompt the world’s sugar mills to divert more cane crushing toward sugar production rather than ethanol, thus boosting sugar supplies.
Concerns that dry weather from an El Niño event could disrupt global sugar production are bullish for prices. Last Wednesday, Japan’s Meteorological Agency confirmed an El Niño weather pattern had formed across the equatorial Pacific. The emergence of an El Niño is likely to curb rainfall in Brazil, India, and Thailand, the world’s three largest sugar-producing regions. India’s weather office recently lowered its cumulative rainfall estimate for the June-September monsoon season last Friday to 90% of the long-term average, down from a forecast of 92% issued in April. The US National Oceanic and Atmospheric Administration (NOAA) estimates a 67% probability of a “Super El Niño” this year, the strongest ever recorded.
As a bullish factor, sugar trader Czarnikow last Thursday cut its global 2026/27 sugar balance estimate from a surplus of 1.4 MMT to a deficit of -100,000 MT, as Brazil’s sugar mills produce more ethanol than sugar amid the surge in crude oil prices.
On April 28, Conab, in its initial report for the new sugar season, forecast that 2026/27 Brazilian sugar output will decline by -0.5% to 43.952 MMT, while ethanol output will climb by +7.2% y/y to 29.259 million liters. On April 21, the USDA forecast Brazil’s 2026/27 sugar production at 42.5 MMT, down -3% y/y, citing millers crushing more cane for ethanol than for sugar.
On April 7, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) revised its 2025/26 sugar production forecast to 32 MMT, down from an earlier projection of 32.4 MMT. The ISMA also projects India’s 2025/26 sugar exports of 800,000 MT. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies. Meanwhile, the USDA on April 30 said it expects a 2026/27 sugar surplus in India of 2.5 MMT, the first surplus in two years. India is the world’s second-largest sugar producer.
