Sugar futures hit three-week lows on demand concerns

Sugar futures have experienced significant volatility, hitting three-week lows due to mounting demand concerns and record-breaking contract deliveries. In the London market, a delivery of 499,350 metric tons against the October contract—a 91% increase year-over-year—signaled weak physical demand.

Market forecasts for global sugar supply remain mixed. While the International Sugar Organization projects a deficit for the 2026/27 season, StoneX has raised its deficit forecast for that period to 1.7 million metric tons, citing Brazil’s potential shift toward ethanol production. Conversely, weather-related production risks are emerging in other major producing regions; Thailand’s Thai Sugar Millers Corp anticipates a 17% production drop for 2026/27, and India’s Earth Science Ministry has warned of a potentially weak monsoon.

In related commodity news, cocoa futures fell approximately 5% amid fears of a seasonal surplus and dented demand. Meanwhile, coffee prices saw slight increases following recent lows, though they remain pressured by rising stocks and favorable weather in Brazil and Vietnam.