Raw Sugar #11 Rallies as Futures Curve Firms and Policy Risks Mount

ICE raw sugar futures extended their recovery on August 13, with the near contract up over 2% and the forward curve modestly firmer, reflecting renewed concern over medium‑term availability. Recent policy tightening in India and steady-to-firmer refined export offers from Brazil indicate that the physical sugar cane market remains underpinned despite the recent correction. After several weeks of two‑way trade, the sugar complex is regaining upward momentum. Futures gains are broad-based across the 2026–2029 curve, suggesting that the market is repricing not only immediate tightness but also structural risks from weather, ethanol policies and export restrictions. At the same time, Brazilian FOB refined sugar offers in EUR show a gentle uptrend since October 2024, pointing to resilient import demand even at higher price levels. The key watch factors now are Brazil’s weather, India’s export stance and any adjustments to ethanol diversion.

Prices

The ICE Raw Sugar No. 11 curve closed notably higher on August 13, 2026. The front October 2026 contract settled at 16.82 USc/lb, up 0.40 cents (+2.38%) on the day, with solid volume above 100,000 lots. Further out, March 2027 finished at 17.81 USc/lb (+2.08%), May 2027 at 17.49 (+1.83%) and July 2027 at 17.30 (+1.73%). Contracts through October 2028 and into 2029 also posted smaller but consistent gains, indicating a firming forward structure rather than a purely front‑end squeeze.

Converted into approximate EUR per metric ton, this places the nearby futures area in the low‑ to mid‑400s EUR/t range, still historically elevated but below the peaks seen during earlier supply shocks. In the physical market, Brazilian refined sugar (ICUMSA 45, FOB São Paulo) has edged up from around 0.51–0.52 EUR/kg in October 2024 to about 0.53 EUR/kg in late October 2024, signalling a mild but persistent appreciation of refined export values in EUR terms.

Supply & Demand

On the supply side, India remains a major swing factor. New Delhi has moved from quota‑managed exports to a broad prohibition on sugar shipments until at least September 30, 2026, exempting only pre‑booked cargoes and certain food‑security‑driven deals. This effectively removes a key exporter from the global raw sugar trade for the current season, forcing more demand towards Brazil, Thailand and other origins.

At the same time, India’s ethanol‑blending drive has tightened cane availability for crystallised sugar, and public debate has intensified around curbing cane use for ethanol to cool domestic sugar prices. While any formal rollback remains uncertain, the policy noise underscores how quickly government intervention could swing more cane back to sugar—or further reduce exportable surpluses. For now, the futures curve appears to be pricing a prolonged period of constrained Indian exports and elevated policy risk.

Fundamentals

The steady upward tilt from the October 2026 contract around 16.8 USc/lb to the March 2028–May 2029 strip near 17.0–17.9 USc/lb suggests a modestly bullish term structure rather than strong backwardation. This reflects a balance between improving supplies from recent crushes in Brazil and structural concerns about weather variability, competing crop economics and biofuel policies. The rising volumes concentrated in the nearby contracts indicate active hedging by producers and consumers adjusting to the new policy landscape.

Physical refined sugar pricing out of Brazil in EUR supports this view. FOB São Paulo offers for ICUMSA 45 have been nudging higher (around 0.51–0.53 EUR/kg over recent months), implying that exporters are able to maintain margins and that buyers have, so far, accepted higher baseline prices. Against the backdrop of Indian restrictions and uncertain cane allocation to ethanol, this reinforces the idea that the global sugar cane balance sheet will stay relatively tight into 2026/27.

Weather & Regional Outlook

Recent discussions in key producing countries point to lingering concerns over El Niño/La Niña‑related volatility, especially for India’s monsoon and parts of Brazil’s Center‑South cane belt. Market chatter highlights that earlier El Niño episodes contributed to fears of lower Indian output and justified the current export bans. While no major new weather shock has been reported over the past few days, traders remain highly sensitive to any indications of rainfall deficits or excessive heat during critical cane growth stages.

In this environment, even relatively small deviations from normal weather in Brazil or India can have outsized price impacts, given the thin buffer from carry‑in stocks and constrained export pipelines. Weather‑driven revisions to crush and sucrose content are therefore likely to be a key intraseasonal driver of ICE #11 volatility through the remainder of 2026.

Trading Outlook

• Producers (hedgers): The firm forward curve out to 2028/29 and the latest broad‑based rally argue for layering in additional hedges on price strength, especially on Oct 2026–Jul 2027 contracts, while keeping some upside participation given persisting policy and weather risks.
• Industrial buyers/refiners: With Indian exports curtailed and Brazilian FOB refined prices in EUR grinding higher, consider increasing coverage on nearby and first‑half 2027 needs, using price dips to extend hedges rather than waiting for a return to pre‑restriction levels.
• Speculative participants: The combination of a supportive fundamental backdrop and an only modestly contangoed curve favours a cautiously constructive stance, but tight risk management is warranted given the potential for policy reversals (e.g., ethanol or export rules) to trigger sharp corrections.

3‑Day Directional View (EUR‑Denominated Benchmarks)

• ICE Raw Sugar #11 (nearby, EUR/t): Bias mildly higher over the next 3 sessions, with dips likely to attract buying given recent momentum and policy‑driven tightness.
• Brazil refined sugar FOB São Paulo (EUR/kg): Sideways to slightly firmer, with limited downside as long as Indian export bans and ethanol‑related uncertainty persist.
• Forward curve (2027–2028 deliveries, EUR/t): Stable to slightly firmer, reflecting ongoing demand for longer‑dated hedging rather than aggressive speculative positioning.