Sugar Market Sweetens: Price Rally on Weather Concerns & Steady Demand

The global sugar market is staging a modest rally, buoyed by a mixture of weather-related crop concerns and a stable demand picture. ICE Sugar No. 11 futures (the benchmark for raw sugar trade) have posted a notable upward shift across multiple maturities, signaling a cautious but positive sentiment among traders. This move comes on the back of ongoing dryness in top exporter Brazil, patchy monsoon performance in India, and looming risks of El Niño impacting Southeast Asian harvests. In addition, an uptick in ethanol production as crude oil prices recover is supporting the diversion of sugarcane from sugar refining to fuel, tightening visible supply on the world market. Recent CFTC reports reveal speculators adding to net long positions, reflecting renewed optimism following last quarter’s correction.

The latest price table shows closing prices and positive weekly changes across all key contracts, with the volume most pronounced on near-term maturities. Meanwhile, global fundamentals point to tighter inventories and a near-stable, if not slightly rebounding, demand base, thanks in part to resilient confectionery and beverage consumption even amid broader economic uncertainty. Leading importers such as China and Indonesia remain active, while EU beet harvests face some pressure from wet weather.

Below, we break down the current state of the sugar cane market, examine key supply-and-demand drivers, provide the latest weather outlook for critical growing regions, and offer a data-driven trading perspective and price forecast.

📈 Prices: Key Sugar Futures at a Glance

Contract	Close (US-Cent/lb)	Weekly Change (%)	Volume	Sentiment
Mar 26	14.98	+1.47%	52,083	Bullish
May 26	14.47	+1.24%	22,045	Bullish
Jul 26	14.40	+0.83%	15,373	Neutral-to-bullish
Oct 26	14.73	+0.68%	8,007	Neutral
Mar 27	15.41	+0.58%	3,330	Neutral

🌍 Supply & Demand Drivers

• Production: Brazil’s CS region faces rain deficits, delaying cane harvest and reducing sucrose output; dry-season risks linger in the forecast.
• India: Patchy monsoons, especially in Maharashtra and Uttar Pradesh, pressure output forecasts. Crop yields are below last year but slightly above last month’s report.
• Thailand: Drought effects lingering from last year; 2024/25 crop still uncertain.
• Ethanol Diversion: Higher oil prices attract cane to bioethanol, curbing sugar output in Brazil.
• Demand: Steady imports in China, Indonesia. EU beet sugar output challenged by wet sowing conditions.

📊 Market Fundamentals

• Global stocks-to-use ratio remains near multi-year lows, underpinning prices.
• Speculative positions: Managed funds added net longs over the week, reversing net short in Q1.
• Physical stocks: Indian government retains export quotas, limiting spot availability.
• World price competitiveness remains strong compared to local feedstock for ethanol.

☁️ Weather Outlook

• Brazil (CS): Mostly dry outlook for the next 10 days, with rainfall 20-30% below average. Some risk to late-harvest yields if dryness persists.
• India: Monsoon expected to regain strength but variability likely; western cane belt at risk of moisture stress.
• Thailand: Normal dry season ongoing; relief needed by July for next plantings.

🌎 Global Production & Stock Table

Country	2023/24 Production (mln t)	Stocks (mln t)	YOY Change
Brazil	41.1	2.8	−2.5%
India	32.5	6.2	−4.0%
Thailand	8.3	1.0	−1.8%
EU	14.8	1.5	0.0%

📌 Trading Outlook & Recommendations

• Uptick in managed money net-long positions signals bullish near-term sentiment.
• Weather risks in Brazil and delayed Indian output support cautious buying on dips.
• Watch for government export policy changes in India.
• Bullish bias persists above 14.40 USct/lb (Jul 26 support).
• Hedgers should consider layering forward sales into early 2027.

📆 3-Day Regional Price Forecast ICE No.11 (US-Cent/lb)

Contract	Current	Forecast Range	Bias
Mar 26	14.98	14.85 – 15.15	Bullish
May 26	14.47	14.40 – 14.60	Bullish
Jul 26	14.40	14.30 – 14.55	Slightly Bullish