Sugar Cane Market: ICE No.11 Softens as Global Surplus Builds

ICE Sugar No.11 futures have eased across the forward curve, with the May 2026 contract slipping to around 15.5 USc/lb and deferred months only modestly higher, signaling a soft but not collapsing market.

After last year’s steep correction from the 2023 price spike, the sugar cane complex now trades in a calmer, mildly bearish environment. Nearby ICE No.11 contracts from May 2026 to March 2028 all closed lower on 23 March, but the curve remains gently upward‑sloping, reflecting comfortable medium‑term supply rather than acute oversupply. Brazilian refined sugar offers in São Paulo stay firm in EUR terms, supported by FX and logistics, even as global benchmarks drift down. Weather risks in Brazil and evolving Indian export policy remain the key swing factors for the next price leg.

📈 Prices & Curve Structure

The latest ICE Sugar No.11 settlement on 23 March 2026 shows a synchronized softening across contracts:

• May 2026: 15.52 USc/lb (−0.18, −1.16% day-on-day)
• July 2026: 15.70 USc/lb (−0.13, −0.83%)
• October 2026: 16.07 USc/lb (−0.08, −0.50%)
• March 2027: 16.70 USc/lb (−0.06, −0.36%)
• Through October 2028, contracts edge up to about 16.8–16.9 USc/lb with increasingly smaller daily moves.

Converted to EUR (assuming ~0.92 EUR/USD and 1 lb = 0.4536 kg), this places May 2026 ICE No.11 near EUR 345–350 per tonne, with late‑2027/2028 deliveries closer to EUR 370–380 per tonne. These levels are well below the 2023 peaks but broadly in line with the softer 2024 average highlighted in recent international commodity reports, which show sugar around EUR 420 per 100 kg in 2024, down sharply year-on-year.

Contract	Close (USc/lb)	Approx. EUR/tonne*	Daily Change
May 2026	15.52	≈ EUR 348	−1.16%
July 2026	15.70	≈ EUR 352	−0.83%
October 2026	16.07	≈ EUR 360	−0.50%
March 2027	16.70	≈ EUR 374	−0.36%

*Indicative conversion from USc/lb to EUR per tonne.

Physical refined sugar offers from Brazil (ICUMSA 45, FOB São Paulo) remain around EUR 0.49–0.51/kg (EUR 490–510/tonne), showing that origin premiums, freight and refining margins keep the cash market above raw futures equivalents despite the recent dip in ICE No.11. This spread provides some cushion for cane producers but pressures refiners and importers whose margins are tied more directly to futures.

🌍 Supply, Demand & Policy Drivers

Fundamentally, the market is grappling with a return to more ample global supply. Recent industry and USDA assessments point to global sugar production rising significantly in 2025/26, with output up around 8–9 million tonnes year‑on‑year and higher ending stocks. India in particular is expected to see a strong rebound in cane yields and sugar output, contributing to the surplus picture.

On the policy side, New Delhi has shifted from a strict export‑ban stance toward a more flexible, quota‑based export regime. The Indian government recently signaled willingness to allow additional sugar exports in 2025/26, inviting mills to apply for a further 0.5 million tonnes (LMT) of quota on top of earlier allocations, subject to shipment by mid‑ and end‑2026. This gradual reopening releases pressure from domestic inventories and adds incremental supply to the world market, reinforcing the mild bearish tone in ICE No.11.

At the same time, Brazil remains the decisive swing producer. High cane availability and favorable economics for sugar versus ethanol continue to encourage Brazilian mills to prioritize crystal sugar output whenever energy prices and domestic policy allow, adding to exportable surpluses. Although recent extreme rainfall and flooding in parts of Minas Gerais highlight weather‑related risks, the main Center‑South cane belt currently faces no widespread drought threat, and the outlook suggests overall adequate moisture heading into the new crush.

📊 Fundamentals & Price Implications

The current ICE No.11 term structure reflects a market transitioning from tightness to balance:

• Gentle contango: Deferred contracts from 2027–2028 trade about 1.2–1.4 USc/lb above May 2026, consistent with comfortable stock cover rather than scarcity.
• Volatility compression: Daily changes along the curve narrow beyond 2027 (−0.18 USc/lb in May 2026 vs only −0.01 in October 2028), signaling reduced perceived tail‑risks in outer years.
• Benchmark vs. physical: The gap between ICE raws (≈EUR 350–380/tonne) and Brazilian refined FOB (≈EUR 500/tonne) remains structurally wide, reflecting refining, freight and risk premia that are not likely to disappear quickly.

From an ethanol perspective, lower global sugar prices and a relatively soft energy complex reduce the incentive for Brazil and India to divert additional cane to biofuels, especially as India has recently been relying more on grain‑based ethanol. That leaves more cane available for sugar, a dynamic that caps rallies in ICE No.11 unless severe weather or policy shocks intervene.

In Europe, the newly concluded India–EU free trade agreement lays the groundwork for lower tariffs on a range of agri‑food products over time. While detailed sugar‑specific provisions and timetables are still being implemented, the direction of travel suggests a gradual easing of trade frictions, which could enhance the role of Indian refined sugar in supplying niche EU demand once domestic and WTO constraints permit.

📆 Short-Term Outlook & Trading Ideas

Near‑term sentiment in the sugar cane market is cautiously bearish to sideways. Prices below 16 USc/lb have already triggered some demand interest from price‑sensitive buyers, but the combination of stronger 2025/26 global production and the progressive reopening of Indian exports argues against a sustained rally without a new weather or macro shock.

• Producers (cane growers, mills): Consider layering in hedges on 2026–2027 production around current ICE No.11 levels using a mix of forwards and options, taking advantage of the still‑elevated outer‑year prices relative to the post‑2023 downtrend.
• Refiners and importers: Use current contango to secure a portion of 2026–2027 raw sugar needs while retaining some upside participation via calls, as higher‑cost origins and logistics can still tighten delivered EUR prices even in a soft futures environment.
• End‑users (food & beverage): Lock in part of 2026–2027 refined sugar requirements in EUR terms, particularly for Brazil‑origin ICUMSA 45, where physical offers remain attractive versus historical peaks but could firm if freight or FX move abruptly.

📍 3-Day Directional Price Indication (EUR)

• ICE No.11 (front May 2026, EUR/tonne equivalent): Mild downside bias; expected to trade in a EUR 340–355/tonne range, with selling emerging on intraday rallies.
• Brazil refined ICUMSA 45 FOB São Paulo (EUR/tonne): Largely stable in the EUR 490–510/tonne band; only limited spillover from small futures moves expected in the very short term.
• Deferred ICE No.11 (2027–2028, EUR/tonne): Sideways to slightly softer, as the market digests comfortable medium‑term stock projections and monitors Brazilian weather into the main crush.