Sugar prices rose on the day, with London ICE white sugar moving to a 4-week high and New York futures also gaining. The advance followed fresh assessments pointing to tighter global supplies for the 2026/27 crop year, alongside renewed caution about monsoon conditions in India and the risk that El Niño could disrupt production across major growing regions.
Key takeaways
- Price move: October New York world sugar #11 rose about 1.3%, while October London ICE white sugar #5 was up about 1.3%.
- Catalyst: Commodity analysts raised expectations for a global deficit in 2026/27, while weather outlooks kept pressure on the market’s supply assumptions.
- Implication: The market is increasingly focused on production risks in India and the potential impact of El Niño on rainfall in Brazil, India and Thailand.
- What to watch: Ongoing monsoon updates and further revisions to deficit forecasts for 2026/27 could drive near-term volatility.
What drove the move
The session’s gains were tied to a shift in balance-sheet expectations for the 2026/27 sugar year. On the supply side, several analysts revised their outlooks toward deficits.
Covrig Analytics said it now expects a global sugar deficit of -300,000 metric tons for 2026/27, compared with a June forecast that had pointed to a +100,000 metric ton surplus. Green Pool Commodity Specialists raised its expected deficit to -3.3 million metric tons from a June estimate of -1.76 million metric tons. StoneX also increased its 2026/27 deficit forecast to -1.7 million metric tons from a prior May estimate of -550,000 metric tons.
Weather risk and India’s crop outlook
Concerns about India’s sugar crop added to the bullish tone. India’s Meteorological Department said August and September monsoon rainfall is likely to be below normal, and India’s Earth Science Ministry warned the monsoon could be the weakest in 11 years. With India’s monsoon season running from June through September, traders have been tracking whether rainfall supports cane development or increases the probability of production shortfalls.
The weather narrative also connects to broader El Niño risk. The US Climate Prediction Center has said the El Niño pattern developing across the equatorial Pacific is likely to be among the strongest in more than 75 years, a setup that could reduce rainfall in key sugar-producing regions including Brazil, India and Thailand.
In the latest data referenced in market coverage, India’s Meteorological Department reported cumulative monsoon rainfall was 11% below normal as of August 5, improving from 42% below normal on June 30. Even with that improvement, the market appears to be treating the overall monsoon trajectory as uncertain given earlier projections and ongoing El Niño concerns.
Brazil ethanol vs. sugar: demand for cane affects output
In addition to India, attention remains on Brazil’s production mix. Unica, cited in the reporting, said Brazil’s Center-South sugar production through May in the 2026/27 cycle was 6.838 million metric tons, down 2.0% year over year, as mills increased ethanol output. The portion of sugarcane used for sugar fell to 41.42% from 50.09% a year earlier, while cane directed to ethanol rose to 58.38% from 49.91%.
This matters for near- and medium-term supplies because ethanol production competes directly with sugar for available cane. Earlier guidance also pointed to that tug-of-war: Conab’s initial report for the new sugar season forecast Brazil’s 2026/27 sugar output at 43.952 million metric tons, down 0.5%, alongside higher ethanol output expected to rise 7.2% year over year to 29.259 million liters.
How forecasts for 2026/27 have been shifting
While the market is weighing deficit risk for 2026/27, longer-running forecast history shows expectations have been moving between surplus and deficit scenarios depending on weather assumptions.
The International Sugar Organization forecast a record global sugar crop for 2025/26 and upgraded its surplus estimate. It projected 2025/26 global sugar production at 182 million metric tons (up 3.5% year over year) and raised the 2025/26 surplus to 2.2 million metric tons from 1.22 million metric tons, after a -3.46 million metric ton deficit in 2024/25.
For 2026/27, however, ISO projected global sugar production to fall by 1.15% year over year to 180 million metric tons, and forecast a global deficit of -262,000 metric tons, citing potential El Niño impacts on harvests in India and Thailand.
Broader agricultural forecasts also support the idea of tighter conditions ahead. The USDA, in its biannual report released in May, projected global 2026/27 sugar production at 184.854 million metric tons (down 6.5% year over year from 186.056 million metric tons for 2025/26). It expected 2026/27 human sugar consumption to increase 0.4% year over year to a record 179.991 million metric tons, and projected global ending stocks to rise 2.0% year over year to 44.410 million metric tons. The USDA Foreign Agricultural Service predicted Brazil’s 2026/27 sugar production would fall 3.0% year over year to 42.5 million metric tons, India’s output would rise 12% to 33.6 million metric tons, and Thailand’s would decline 15.6% to 9.5 million metric tons.
Against that backdrop, traders appeared to be leaning into the newer deficit estimates now being highlighted by multiple commodity consultancies.
What to watch next
Going forward, sugar markets are likely to keep reacting to incremental weather updates for India and to additional revisions to 2026/27 balance forecasts. The next key signals will be continued monsoon reporting and further commentary from major industry and government sources on crop outcomes. With analysts already clustering around tighter supply expectations, any updates that change the perceived likelihood of deficits could determine whether prices extend gains or retrace from the recent lows.
