Sugar No.11 Slides as Forward Curve Softens but Demand Stays Solid

Raw sugar futures on ICE No.11 have come under broad pressure, with the May 2026 contract retreating toward the mid‑15 USc/lb area and the entire curve marking modest daily losses. The move reflects profit‑taking after the recent resilience in prices, amid improving supply expectations and cautious speculative positioning.

Global sugar cane and raw sugar markets are nevertheless underpinned by steady import demand and a still‑comfortable but tightening balance. The current pullback is more a normalization from elevated levels than the start of a structural bear market. Weather in Brazil’s Center‑South and policy signals from India will remain key for direction into April.

📈 Prices & Futures Structure

ICE Sugar No.11 showed synchronized declines across listed contracts on 25 March 2026. The front May 2026 contract settled at 15.55 USc/lb (‑2.1% d/d), July 2026 at 15.72 (‑1.8%), and October 2026 at 16.09 (‑1.6%). Deferred contracts out to October 2028 also posted smaller losses of 0.2–1.0 percentage points, keeping a mild upward‑sloping curve intact.

Trading volume was robust, with roughly 233,000 contracts changing hands, underscoring that the move lower came with meaningful participation rather than illiquid noise. AP‑reported estimates show open interest for ICE sugar around 0.97–1.0 million contracts in recent sessions, confirming an active, well‑owned market.

Contract	Settle (USC/lb)	Change d/d	Approx. EUR/mt*
May 2026	15.55	‑2.1%	≈ 347 EUR/mt
Jul 2026	15.72	‑1.8%	≈ 351 EUR/mt
Oct 2026	16.09	‑1.6%	≈ 360 EUR/mt

*Approximate conversion using 1 USC/lb ≈ 22.3 EUR/mt at current FX levels; for indication only.

🌍 Supply & Demand Drivers

On the supply side, Brazil remains the pivotal origin. Latest seasonal outlooks still point to a solid Center‑South cane crop in 2025/26, though February’s extreme flooding in parts of Minas Gerais highlights the weather risks embedded in the wider Southeast region. For now, the price curve suggests the market is more concerned about medium‑term availability than immediate shortage, consistent with the slight carry into 2027–28.

India is quietly re‑emerging as an export factor after the severe restrictions of 2023/24. Policy documents from February allow an additional 0.5 Mt of sugar exports in the current 2025/26 season, and trade chatter this week points to rising shipments as a weak rupee and firmer world prices encourage mills to participate. Even with this return, volumes remain well below the peaks of earlier years, limiting outright bearish pressure.

Demand remains resilient, led by steady imports into North Africa, the Middle East and parts of Asia. With energy prices volatile and ethanol economics fluctuating, Brazilian mill allocation between sugar and ethanol will be a crucial swing factor but has not yet shifted decisively enough to tighten nearby raw sugar availability.

📊 Physical Market & Refining Margins

In the physical market, recent offers for Brazilian refined sugar (ICUMSA 45, FOB São Paulo) have held in a relatively firm range around 0.53 EUR/kg, up from approximately 0.51–0.52 EUR/kg in October 2024. This signals that downstream demand and refining margins remain supportive, even as futures ease back from their highs.

The combination of a gently backward‑adjusting futures curve and stable refined prices indicates that the current correction is more about repricing risk than a collapse in end‑user demand. Importers that had delayed coverage on expectations of a deeper sell‑off are beginning to see value, especially for late‑2026 and 2027 positions where contango still offers a cost‑of‑carry cushion.

🌦 Weather & Regional Outlook

Near‑term weather in Brazil’s main Center‑South cane belt is generally favorable, with a break from the extreme rainfall seen in parts of Minas Gerais and no immediate threat of widespread drought in late March. Soil moisture profiles are adequate heading into the next growth phase, supporting the view of a broadly comfortable 2026/27 crop if conditions remain neutral.

No major new weather shocks have been reported in key Asian cane producers over the last few days. However, with El Niño/La Niña signals still in flux, traders will continue to price a weather risk premium into the 2027–28 portion of the curve, helping explain why those contracts have corrected less than the front months.

📆 Trading Outlook & Strategy

• For importers/end‑users: The dip toward the mid‑15 USc/lb area (≈ 345–355 EUR/mt) offers a window to extend cover into Q4 2026 and early 2027, especially where inventories are low.
• For producers/mills: Use any short‑covering rallies back toward recent highs to incrementally hedge 2026/27 output, focusing on Oct 2026–Mar 2027 contracts where the curve still prices a modest premium.
• For traders/speculators: The broad‑based but orderly pullback and high open interest suggest a market consolidating rather than breaking down; consider buying on further dips toward technical support, with tight risk limits in case Indian exports scale up faster than expected.

📉 3‑Day Directional View (EUR Perspective)

• ICE No.11 May 2026: Slightly bearish to sideways; likely to trade in a range equivalent to roughly 340–355 EUR/mt as the market digests recent losses.
• ICE No.11 Jul/Oct 2026: Sideways bias; curve carry should remain intact, with prices hovering around a 5–15 EUR/mt premium over May 2026.
• Refined FOB Brazil (ICUMSA 45): Stable to mildly firm around 530 EUR/mt, supported by demand and still‑positive refining margins.