Sugar prices hit 17-month high amid global supply concerns

Global raw sugar futures have reached a 17-month high, driven by supply concerns and rising demand. Prices have increased approximately 30% since the start of the year as the market outlook shifts from a surplus toward a potential deficit for the 2026–2027 season.

Supply disruptions are being driven by weather patterns in major producing regions. Heavy rainfall in Brazil’s Center-South region has hindered sugarcane processing, while India has experienced monsoon levels roughly 15% below normal. The El Niño phenomenon is expected to further impact Asian crops by creating drier conditions in India.

In response to record domestic prices, India has permitted duty-free imports of 1 million tonnes of sugar. The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) reports that mills have applied for approximately 800,000 tonnes of this quota. Despite a recent softening in Indian domestic ex-mill prices, ISMA President Niraj Shirgaokar stated that imports remain commercially viable due to firming global prices.

The International Sugar Organization estimates a potential global deficit of 260,000 tons in the upcoming season. Additionally, high crude oil prices may influence supply, as mills might divert more sugarcane toward ethanol production rather than sugar.