World sugar prices extended gains on Tuesday, with October New York sugar futures rising modestly and October London ICE white sugar climbing more sharply. The market pushed higher to fresh multi-week highs as commodity analysts increasingly pointed to tighter global supply prospects for the 2026/27 season, while weather concerns—particularly around monsoon rainfall in India and the likelihood of an El Niño—added another layer of upside risk.
Key takeaways
- Price move: October New York world sugar #11 futures advanced to a 3.5-week high, while October London ICE white sugar #5 reached a 4-week high.
- Catalyst: Analyst forecasts increasingly shifted toward a 2026/27 global sugar deficit, supported by concerns about India’s crop and El Niño-driven dryness risk.
- Supply outlook: Multiple reports cited tighter future availability as mills in Brazil adjust production toward ethanol amid stronger crude.
- Weather risk: Reuters cited India’s meteorological updates indicating monsoon rainfall could be below normal, with El Niño expected to dampen rainfall across major sugar-producing regions.
- Implication for investors: Futures may remain sensitive to crop updates and seasonal weather signals as the market reprices deficit probability for 2026/27.
What drove the move
Prices rose as forecasters revised their balance sheets toward tighter future supply. Covrig Analytics, according to its Monday comments, now expects a global sugar deficit in 2026/27 of -300,000 MT, compared with a June projection of a +100,000 MT surplus. Green Pool Commodity Specialists, in an update reported last Wednesday, increased its 2026/27 deficit forecast to -3.3 MMT from a June estimate of -1.76 MMT. StoneX also raised its 2026/27 global deficit expectation to -1.7 MMT, versus a May estimate of -550,000 MT.
In parallel, market attention focused on weather and crop conditions. Concerns over India’s monsoon supported prices after India’s meteorological authorities warned that rainfall during August and September is likely to be below normal, and that this year’s monsoon could be the weakest in 11 years. India’s monsoon typically runs from June through September.
Additional bullish pressure came from risk of an El Niño pattern, which the U.S. Climate Prediction Center said on July 8 was likely to become one of the strongest in more than 75 years. The report said El Niño could curb rainfall in Brazil, India, and Thailand—the three largest sugar-producing regions—raising the possibility of disrupted harvests or reduced yields.
More recent monsoon data also reflected improving but still cautious conditions. The India meteorological department reported that cumulative monsoon rainfall was 12% below normal as of August 3, improving from 42% below normal on June 30. The updates followed a period in which New York sugar had fallen to a five-month low earlier, with expectations of higher Indian output after monsoon conditions improved.
Brazil supply signals and the ethanol link
While weather risks in Asia drove near-term support, Brazil’s production mix continued to matter for longer-dated expectations. Unica, according to reporting from June 22, said 2026/27 Brazil Center-South sugar production through May totaled 6.838 million metric tons, down 2.0% year over year. The report also highlighted a shift in how mills use sugarcane: the share directed to sugar fell to 41.42% from 50.09%, while the share allocated to ethanol rose to 58.38% from 49.91%.
Industry commentators tied that shift to economics, including improved ethanol margins amid stronger crude oil prices. Czarnikow, reported last June 11, cut its global 2026/27 sugar balance estimate from a surplus of 1.4 million metric tons to a deficit of 100,000 MT, citing Brazil’s tendency to favor ethanol production.
Broader planning assumptions have also pointed to a softer sugar output trajectory for Brazil. On April 28, Conab’s initial report for the new season forecasted 2026/27 Brazilian sugar output down 0.5% to 43.952 MMT, while ethanol output was projected to increase 7.2% year over year to 29.259 million liters.
How earlier global forecasts differ for 2026/27
The current bullish tone for 2026/27 comes after mixed signals from major forecasting bodies about the direction of global balances. The International Sugar Organization forecast a record global crop for 2025/26 on May 18, projecting production of 182 MMT, up 3.5% year over year, and raised its surplus estimate for 2025/26 to 2.2 MMT from 1.22 MMT in February, following a deficit of 3.46 MMT in 2024-25.
For 2026/27, ISO projected a decline in production of 1.15% year over year to 180 MMT and a global deficit of 262,000 MT, citing the potential impact of El Niño on harvests in India and Thailand.
The USDA’s biannual outlook, released in May, projected that global 2026/27 sugar production would fall 6.5% year over year to 184.854 MMT from 186.056 MMT in 2025/26. The USDA expected global human sugar consumption to rise 0.4% year over year to 179.991 MMT, and forecast global 2026/27 ending stocks increasing 2.0% year over year to 44.410 MMT. Within country-level assumptions, the USDA’s Foreign Agricultural Service predicted Brazil’s 2026/27 sugar production would decrease 3.0% year over year to 42.5 MMT, India’s production would increase 12% year over year to 33.6 MMT, and Thailand’s production would fall 15.6% year over year to 9.5 MMT.
Notably, the contrasting figures underscore uncertainty about the 2026/27 balance as the market weighs supply risks against expectations for output recovery in some regions. For example, while ISO and USDA point to tighter conditions, other commercial estimates vary in magnitude—Covrig Analytics moved toward a moderate deficit, while StoneX and Green Pool raised larger deficits.
What to watch next
With futures already reacting to deficit revisions and monsoon risk, investors will likely keep monitoring official weather updates for India and seasonal signals linked to El Niño. Ahead, additional crop reports, updated balance-sheet forecasts from major analytics firms, and guidance around upcoming production and export conditions—particularly for India and Brazil—could drive further moves in both New York and London sugar contracts.
