US Cane Sugar Tightens While Mexico Targets New Export Channels

US cane sugar production is set to decline in 2026/27, led by a sharp cut in Florida, while Mexico slightly increases output and diversifies exports beyond the US. Together with continued high-tier imports into the US, these shifts point to a structurally tight, regulation-driven North American sugar market that will remain reliant on international supply. North American cane sugar fundamentals are entering 2026/27 with contrasting regional dynamics. The US faces lower cane output in both Florida and Louisiana due to drought, pest pressure and recent cold weather, while Mexico expands harvested area, improves sucrose yields and raises export availability. At the same time, the US is curbing forecast imports from Mexico but continues to draw in unusually high volumes at high tariffs, underlining latent supply tightness. Global raw and white sugar benchmarks remain historically firm, and Brazilian refined FOB values in São Paulo have been edging higher, reinforcing an overall mildly bullish tone for cane sugar into the new marketing year.

Prices

International sugar benchmarks remain elevated. The International Sugar Organization’s daily white sugar price index recently traded in the mid‑USD 500s per tonne, with raw sugar futures around the high‑teens cents per pound, signaling a still-tight global balance despite some production recoveries.

Brazilian refined sugar (ICUMSA 45) FOB São Paulo is quoted at 0.53 EUR/kg FOB as of 28 October 2024, up from 0.52 EUR/kg on 18 October and 0.51 EUR/kg on 9 October, confirming a modest upward trend in export quotations from the world’s key supplier. This firming in Brazilian values provides a floor to global refined prices and limits downside for deficit regions.

Supply & Demand

US cane sugar: Florida weakness dominates

The USDA has lowered its 2026/27 US cane sugar production forecast by 88,000 STRV to 4.071 million STRV, about 3% below the record 2025/26 crop. Florida sees the most severe adjustment: expected cane sugar output is cut to 1.819 million STRV, the lowest since 2013/14 and roughly 10% below the July forecast. Florida’s entire sugarcane area was in at least moderate drought at the beginning of September, compounding pest pressure and damage from unusually low temperatures in early February.

Louisiana’s cane sugar forecast is trimmed by 14,000 STRV to 2.252 million STRV, but this would still mark a record, cementing Louisiana’s role as the leading US cane state for a fifth consecutive season. Drought and insect pressure are present here as well, with 53% of area in moderate drought and another 20% classified as abnormally dry in early September. The full impact of pest infestations will only become clear as harvest progresses, with cutting typically starting in September in Louisiana and October in Florida.

Mexico: incremental growth and more exportable surplus

Mexico’s sugar production for 2026/27 is projected at 5.377 million tonnes, about 1% above the current season. The harvested cane area is expected to rise 2% to around 748,000 hectares, with yields at 66.6 tonnes of cane per hectare. A sucrose recovery rate of 10.8% is anticipated, exceeding both last year and the five‑year average, which supports the moderate output gain despite only a small area increase.

Beginning stocks in Mexico for 2026/27 are set to climb to 1.370 million tonnes, with ending stocks near 1.143 million tonnes. Domestic use remains steady at roughly 3.929 million tonnes, meaning that production growth and higher starting inventories largely translate into higher export availability rather than stronger internal demand.

US–Mexico sugar trade: regulated but still tight

The United States has sharply reduced its 2026/27 import forecast for Mexican sugar to 1.188 million STRV, down 158,000 STRV from the August projection. This figure stems from the “U.S. Needs” calculation under the bilateral sugar suspension agreements, which target a US stocks‑to‑use ratio of 13.5%. Despite this downward revision, the official export limit granted to Mexico for September is set at about 831,660 STRV, above July’s roughly 673,000 STRV, reflecting rules that prevent newly calculated limits from falling below previously established levels.

At the same time, Mexican total sugar exports are estimated at 1.387 million tonnes. Shipments to the US and Puerto Rico have been lowered to 1.017 million tonnes, while exports to other destinations are expected to jump to 370,000 tonnes, up sharply from a prior forecast of 205,000 tonnes. This shift indicates that more Mexican sugar will be competing on the global market outside the traditional US outlet, even as Mexico keeps producing sub‑99.2° polarization sugar tailored for the US.

Notably, the US has recently imported unusually large quantities of sugar despite high tariffs. For 2025/26, high‑tier imports have been raised to 1.031 million STRV, with roughly 42,000 STRV of raw sugar entering in August alone under the high‑duty regime. This behavior signals that US refiners and users are willing to pay up for additional supply, underscoring structural tightness within the highly managed US import framework. Recent analysis confirms that high‑tier imports remain elevated and that reductions in future production and Mexican supplies are expected to tighten the balance in 2026/27.

Fundamentals & Weather

The key fundamental story in North America is the divergence between a weather‑ and pest‑affected US cane sector and a modestly improving Mexican industry. In Florida and Louisiana, moderate drought conditions at the start of September and prior cold stress have already prompted official yield downgrades. The invasive mealybug infestation in Florida remains a major uncertainty: yield and quality impacts will only become fully visible as mills advance through the harvest, and further cuts to Florida’s output cannot be ruled out if field losses exceed current assumptions.

Mexico, by contrast, benefits from higher cane yields and improved sucrose recovery rates, which help offset the subdued growth in planted area. Combined with higher starting stocks, this positions Mexico as a key swing supplier for both the US and alternative destinations. However, the country’s decision to channel a larger share of exports to non‑US markets may reduce the flexibility of North American supply in the face of further US weather or pest shocks.

Outlook & Trading Implications

Looking ahead to the 2026/27 season, the US cane crop is likely to remain under downward‑biased risk, especially in Florida, while Louisiana could still post a record but is vulnerable to additional weather or pest setbacks. Mexico’s incremental production gains and higher exportable surplus should cushion the regional market but will increasingly be split between the US and other destinations. Globally, firm white and raw sugar benchmarks and strengthening Brazilian FOB refined prices suggest limited downside for cane sugar values in the short term.

Trading and hedging strategies

• Buyers in the US and Caribbean: Consider securing a larger share of 2026/27 needs early, especially for raw and refined deliveries tied to US Gulf and East Coast, as further downgrades in Florida’s crop and ongoing high‑tier import activity point to persistent basis strength.
• Refiners and industrial users in Mexico and Central America: Use current global price firmness to lock in margins on export‑oriented sugar, while maintaining optionality between US and non‑US outlets as policy‑driven quota adjustments and US high‑tier import flows evolve.
• Producers and traders exposed to Brazilian refined values: The recent rise to 0.53 EUR/kg FOB São Paulo suggests a constructive near‑term bias; consider scaling in hedges on further dips rather than waiting for a major correction that current fundamentals do not clearly justify.

3‑Day Directional Price Indication

• ICE raw sugar futures: Sideways to slightly firmer as markets weigh US supply downgrades against incremental Mexican and Brazilian availability.
• ICE white sugar futures: Mildly bullish bias, supported by strong physical demand and constrained premium cane origins.
• Brazil refined sugar FOB São Paulo: Stable to slightly firmer around recent quotations of 0.53 EUR/kg FOB, in line with tight nearby fundamentals.