Sugar Market Surges on US Tariff Ruling – Bullish Trigger or Short-Covering Rally?

The global sugar market has entered a period of renewed volatility and market tension, as price dynamics shift sharply following a landmark US Supreme Court decision to strike down Trump-era tariffs. This ruling instantly changed international trade flows: Brazil, a world sugar juggernaut, now faces fewer restrictions for exports into the lucrative US market. Traders have seized on this development, with March NY raw sugar climbing 1.63% and May London white sugar advancing 0.82%, propelling New York futures to their highest in over a week. This ruling could funnel more Brazilian sugar into the US, thereby tightening global availability and providing near-term bullish support, even as fundamental surplus concerns linger in the background.

At the same time, a weaker US dollar adds additional fuel, making sugar more attractive to international buyers and amplifying gains. Yet, the rally faces resistance from persistent surplus projections for 2025/26, with key producers India, Thailand, and Pakistan expected to deliver bumper crops, potentially swamping the market with excess supply. While Friday’s rally captures immediate market optimism on policy shifts and currency movement, the industry remains vigilant, carefully watching export flows, India’s policy, and production data to confirm the sustainability of the uptrend.

 

📈 Prices

Exchange	Contract/Type	Closing Price	Weekly Change	Sentiment
ICE NY (March Raw Sugar)	Raw Sugar	(+1.63%)	+1.63%	Bullish short-term
LIFFE London (May White Sugar)	White Sugar	(+0.82%)	+0.82%	Bullish short-term

Origin	Type	Location	Latest Price (EUR/kg)	Prev. Price (EUR/kg)	Date
GB	ICUMSA 32	Norfolk	0.42	0.42	2026-02-16
GB	ICUMSA 32	Norfolk	0.42	0.42	2026-02-16
GB	ICUMSA 45	Norfolk	0.42	0.42	2026-02-16

🌍 Supply & Demand Drivers

• US Supreme Court ruling: Lifts tariffs, allowing more Brazilian sugar into the US; may reduce available supply for the rest of the world and underpin global prices short-term.
• Brazilian Output: Most recent Center-South data shows a 36% YoY drop in late January, though overall seasonal output slightly higher. Mills focus more on sugar over ethanol production.
• India: Monsoon-driven acreage expansion and higher production. New export quotas from the government could unleash more Indian sugar onto global markets, countering tightening elsewhere.
• Thailand & Pakistan: Both expected to report robust output in 2025/26, adding to global supply pressure.
• Currency Effect: Weaker US dollar supports commodity prices and improves sugar’s competitive edge for global buyers.

📊 Fundamentals

• Global Surplus Outlook (2025/26): Estimates at 2.7–3.4 million metric tons, according to analysts and the International Sugar Organization.
• USDA Outlook: Record global sugar production projected for 2025/26; consumption to rise moderately, but stocks expected to decline only slightly.
• Bullish short-term, bearish long-term tilt: Immediate price gains reflect trade policy and currency moves, but supply fundamentals cap upside potential.

⛅ Weather & Production Outlook

• Brazil: Mixed weather reports have tightened late-January output, but year-on-year cumulative crush is stable or higher. Allocation shift favors sugar over ethanol.
• India: Strong monsoons improve cane yields, boosting both acreage and production potential.
• Thailand: Favorable growing conditions projected.

🌐 Global Production & Stock Comparison

Country	2025/26 Production Trend	2025/26 Export Outlook
Brazil	Stable/Modestly Higher	Potential increase to US, rest of world impact negative
India	Significantly Higher	Additional quotas approved, more exports possible
Thailand	Higher	Exports likely to rise
Pakistan	Higher	May add to surplus
Global Inventory	Stocks slightly lower YoY	Still ample versus demand

💡 Trading Outlook & Key Takeaways

• Short-term: Maintain a constructive stance on rallies as tariff changes and currency swings support market.
• Medium-term: Monitor Brazilian-US export flows, Indian policy, and Thai harvest reports for reversal signs.
• Long-term: Remain cautious near highs as surplus projections and production growth threaten downside pressure.
• Hedgers: Consider using market spikes to secure forward coverage.
• Speculators: Watch for signs of market exhaustion if global surplus materializes as expected.

📆 3-Day Regional Price Forecast

Exchange/Product	Direction	Forecast
ICE NY Raw Sugar	Stable/Bullish	Follow-through gains possible, but likely capped by profit-taking
London White Sugar	Stable	Some upside potential, but watch for resistance at recent highs
EU Industrial (EUR)	Flat	EUR/kg prices remain steady with no significant spot movement

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