Sugar prices recovered from three-and-a-half-week lows on Monday, with NY World Sugar #11 finishing higher while London white sugar closed slightly lower. The market remains caught between short-term demand concerns and longer-term risks of a tightening global sugar balance.

October NY World Sugar #11 closed 0.12 points higher at 17.52 cents per pound, a gain of 0.69%, while December London ICE White Sugar #5 fell 1.30 points to 503.20 dollars per tonne, down 0.26%.

The recovery in New York sugar was partly linked to strength in the Brazilian real, which reached a one-week high against the US Dollar. A stronger real can discourage Brazilian producers from selling sugar into export markets because the local-currency value of export revenues becomes less attractive.

However, the physical market remains a significant concern.

The expiry of the October London sugar contract resulted in 499,350 metric tonnes of sugar being delivered, up 91% year-on-year and among the largest October contract deliveries on record. The unusually large delivery has raised concerns about weak physical demand and the availability of sugar for delivery.

At the same time, longer-term supply forecasts remain increasingly divided.

The International Sugar Organization projects a 200,000-tonne global deficit for 2026/27, while StoneX has forecast a substantially larger 1.7 million-tonne deficit. Covrig Analytics has also shifted toward a deficit scenario, while other forecasts point to continued production growth and higher ending stocks.

This divergence means traders are increasingly focused on Brazilian production, Indian weather, Thailand’s crop outlook, global consumption and the direction of speculative positioning.

Sugar Market Snapshot

Market Indicator	Latest Data	Market Signal
October NY Sugar #11	17.52¢/lb	+0.69%
October NY Sugar Change	+0.12	Higher
December London White Sugar	$503.20/MT	-0.26%
October London Contract Deliveries	499,350 MT	+91% y/y
2026/27 ISO Global Balance	-200,000 MT	Deficit
2025/26 ISO Balance	+1.1 MMT	Surplus
StoneX 2026/27 Forecast	-1.7 MMT	Deficit
Covrig 2026/27 Forecast	-300,000 MT	Deficit
2027/28 Czarnikow Forecast	-2.9 MMT	Deficit
India Monsoon Rainfall	15% below normal	Bearish for production
Thailand 2026/27 Production	10 MMT projected	-17% y/y
Brazil Center-South June Production	3.903 MMT	-26.3% y/y
USDA 2026/27 Global Production	184.854 MMT	-6.5% y/y
USDA 2026/27 Consumption	179.991 MMT	Record high
USDA 2026/27 Ending Stocks	44.410 MMT	+2.0% y/y

Sugar Prices Today: New York Recovers From Three-Week Low

NY World Sugar #11 initially fell to its lowest level in approximately three-and-a-half weeks before recovering during Monday’s session.

October sugar eventually closed 0.12 points higher at 17.52 cents per pound.

The recovery suggests that buying interest emerged after the recent decline, particularly as the Brazilian real strengthened.

The London market was less resilient.

December ICE White Sugar #5 closed 1.30 points lower, leaving the two major sugar markets with slightly different signals.

The divergence highlights the uncertainty currently surrounding the market.

Brazilian Real Strength Supports Sugar

Currency movements remain important for sugar because Brazil is the world’s largest sugar producer and exporter.

The Brazilian real rallied to a one-week high against the US Dollar on Monday.

A stronger real can reduce the incentive for Brazilian mills to sell sugar into international markets because exporters receive fewer reais when converting Dollar-denominated revenues.

This can temporarily support international sugar prices by reducing the attractiveness of aggressive Brazilian export selling.

However, currency support can change quickly.

If the real weakens again, Brazilian producers could regain an incentive to increase export sales.

Weak Physical Demand Creates a Major Headwind

One of the clearest bearish signals currently comes from the physical market.

A total of 499,350 MT of sugar was delivered against the October London contract when it expired last Tuesday.

That represented an increase of 91% from the same period last year and was one of the largest deliveries ever recorded for an October contract.

Large deliveries can indicate that substantial quantities of physical sugar are available for delivery and can raise questions about underlying demand.

This is particularly important because sugar prices had recently reached a 17.25-month high on September 10 on expectations of a developing global deficit.

The subsequent decline therefore reflects a reassessment of how quickly supply tightness may actually emerge.

Speculative Positioning Could Increase Volatility

Commodity funds have also accumulated substantial long exposure.

The latest weekly Commitment of Traders report showed funds increasing their net-long NY sugar positions by 791 contracts during the week ending September 15.

Total net-long positioning reached 161,342 contracts, the highest level in almost three years.

Heavy long positioning can support prices when the market is rising, but it can also increase downside pressure if traders begin liquidating positions.

This creates an important risk for sugar.

If fundamental news fails to justify the premium embedded in futures, long liquidation could accelerate a market decline.

Global Sugar Deficit Forecasts Remain Divided

The long-term sugar outlook remains dominated by conflicting forecasts.

The International Sugar Organization projects a 200,000-tonne global deficit in 2026/27, compared with a projected 1.1 million-tonne surplus in 2025/26.

StoneX has adopted a significantly more bullish supply outlook, forecasting a 1.7 million-tonne deficit for 2026/27, compared with its previous estimate of a 550,000-tonne deficit.

Covrig Analytics has also moved toward a deficit, forecasting a 300,000-tonne shortfall.

Czarnikow has projected an even larger 2.9 million-tonne deficit for 2027/28, citing lower sugar cane and sugar beet plantings and weather-related production risks.

These forecasts indicate that several major industry analysts expect the global sugar balance to tighten.

However, the size of the projected deficits varies considerably.

India Weather Becomes Increasingly Important

India remains one of the world’s largest sugar producers, making monsoon conditions critical to the global supply outlook.

India’s Meteorological Department reported cumulative monsoon rainfall 15% below normal as of September 21.

Although the rainfall deficit has improved substantially from 42% below normal on June 30, the overall season remains significantly drier than normal.

The Indian Meteorological Department has warned that the current monsoon could be the weakest in 17 years.

A prolonged rainfall deficit could affect sugar cane yields and therefore tighten future global supplies.

However, the USDA has a more constructive outlook for India’s 2026/27 production, forecasting output to rise 12% year-on-year to 33.6 MMT.

This is one of the major areas where global sugar forecasts diverge.

India Allows Tax-Free Sugar Imports

India has already taken a notable step that highlights concerns about domestic supply.

On August 20, India’s Directorate General of Foreign Trade announced that up to 1 MMT of raw sugar could be imported without taxes through October 31.

India is normally a significant sugar exporter.

The decision is therefore notable because substantial imports have not been common since the 2017/18 season.

If Indian domestic supplies remain constrained, additional imports could remove sugar from the international market and provide support to global prices.

Thailand Production Risks Increase

Thailand is the world’s second-largest sugar exporter and another key component of the global supply outlook.

The Thai Sugar Millers Corp has projected 2026/27 production at 10 MMT, representing a decline of approximately 17% from the previous year.

The USDA’s Foreign Agricultural Service has a similar direction of travel, forecasting Thai sugar production to fall 15.6% to 9.5 MMT.

Lower Thai output would reduce available export supply and could tighten the global market.

This is particularly important if production declines occur simultaneously in Brazil, India or other major producing regions.

Brazil Sugar Production Remains a Key Risk

Brazil remains the dominant producer in the global sugar market.

Unica reported that Brazil Center-South June sugar production fell 26.3% year-on-year to 3.903 MMT.

Lower Brazilian production provides an important bullish signal, particularly given the country’s enormous influence on global exports.

However, Brazil’s mills also have the flexibility to allocate cane between sugar and ethanol.

Higher energy prices can encourage greater ethanol production, potentially reducing the amount of cane processed into sugar.

Conversely, weaker crude oil prices can reduce the relative attractiveness of ethanol production and encourage mills to produce more sugar.

That relationship is particularly important for the outlook after Monday’s sharp decline in crude oil.

El Niño Adds Weather Risk

Weather remains one of the most important long-term variables for sugar.

A strong El Niño pattern can disrupt rainfall across major producing regions including Brazil, India and Thailand.

Reduced rainfall could negatively affect sugar cane production and reinforce expectations of a global deficit.

However, weather forecasts remain inherently uncertain and the ultimate impact depends on the timing, duration and geographical distribution of rainfall.

Traders will therefore continue to monitor weather developments alongside crop estimates rather than relying on a single seasonal forecast.

USDA Presents a Different Global Picture

The USDA’s latest biannual outlook provides a somewhat different perspective from the more aggressive deficit forecasts issued by some private analysts.

The USDA expects global 2026/27 sugar production to decline 6.5% year-on-year to 184.854 MMT, compared with 186.056 MMT in 2025/26.

At the same time, global human consumption is expected to increase 0.4% to a record 179.991 MMT.

The USDA nevertheless forecasts global ending stocks to increase 2% to 44.410 MMT.

This suggests that, despite lower production and record consumption, the USDA does not currently expect the same degree of immediate supply tightness projected by some private analysts.

Bullish Sentiment

1. Global Deficit Forecasts Are Increasing

The ISO expects a 200,000-tonne deficit in 2026/27, while StoneX forecasts a significantly larger 1.7 MMT deficit.

2. Thailand Production Could Fall Sharply

Thailand’s sugar production is forecast to decline between approximately 15.6% and 17%, potentially reducing global export availability.

3. Brazilian Production Has Weakened

Brazil Center-South June sugar production fell 26.3% year-on-year, providing a significant supply-side support factor.

4. Indian Weather Remains Concerning

Cumulative Indian monsoon rainfall remains 15% below normal, increasing uncertainty around future sugar cane yields.

5. India Has Opened the Door to Imports

India’s decision to allow up to 1 MMT of raw sugar imports without taxes highlights potential domestic supply constraints.

Bearish Sentiment

1. Physical Deliveries Were Extremely Large

The expired October London contract received 499,350 MT of deliveries, up 91% year-on-year, raising concerns about weak physical demand.

2. Speculative Long Positions Are Elevated

Funds held 161,342 net-long NY sugar positions, the highest level in almost three years, increasing the potential for long liquidation.

3. USDA Still Forecasts Higher Ending Stocks

The USDA expects 2026/27 global ending stocks to increase 2% to 44.410 MMT.

4. India’s Production Could Recover

The USDA forecasts Indian 2026/27 production at 33.6 MMT, up 12% year-on-year, which could offset production losses elsewhere.

5. Crude Oil Has Fallen Sharply

Lower crude oil prices can reduce the incentive for Brazilian mills to divert cane toward ethanol, potentially increasing sugar production.

Sugar Price Forecast: What Traders Are Watching

NY sugar closed Monday at 17.52 cents per pound, recovering after falling to a three-and-a-half-week low.

The immediate technical and fundamental question is whether the recovery represents renewed demand or simply short covering following the recent decline.

The strongest bullish arguments are centred on potential global production deficits, weaker Brazilian output, Thai production risks and uncertain Indian weather.

The main bearish risks are large physical deliveries, elevated speculative long positioning, potentially higher Indian production and increased Brazilian sugar availability if lower energy prices favour sugar over ethanol.

The key market map is:

Bullish: Global deficit forecasts → weaker Brazil/Thailand output → Indian weather risks → potential supply tightening

Bearish: Large physical deliveries → weak demand → elevated fund positioning → potential long liquidation → higher available production

Sugar Supply Outlook

The global sugar market is moving toward a potentially tighter supply environment, but the timing remains uncertain.

The ISO expects the market to shift from a 1.1 MMT surplus in 2025/26 to a 200,000-tonne deficit in 2026/27.

StoneX sees a considerably larger deficit, while Czarnikow expects the supply shortfall to become even more pronounced in 2027/28.

At the same time, USDA forecasts show that global ending stocks could actually rise during 2026/27.

This divergence is central to the sugar market.

If production losses in Brazil, India and Thailand are greater than currently expected, deficit forecasts could increase further.

If weather improves and production estimates recover, the market could retain more supply than the current bullish forecasts imply.

Sugar Demand Remains the Critical Test

Supply concerns alone may not be sufficient to sustain a prolonged rally.

The large October London contract delivery highlights the importance of physical demand.

The market therefore needs evidence that consumption and import demand can absorb available supply.

China, India and other major consuming countries will remain important, while global refining and ethanol economics will influence the allocation of sugar cane between competing uses.

Sugar Market Outlook for the Coming Sessions

Sugar enters the latest session with a mixed fundamental backdrop.

NY Sugar #11 recovered 0.69%, while London White Sugar declined 0.26%.

The stronger Brazilian real helped support New York prices, but the market remains under pressure from concerns about physical demand.

The longer-term picture is more constructive in several private forecasts, with the ISO, StoneX, Covrig and Czarnikow all identifying potential future deficits.

However, USDA projections remain less aggressive, forecasting higher global ending stocks in 2026/27.

The coming sessions will therefore be driven by Brazilian export activity, currency movements, Indian weather, Thai production estimates, crude oil prices, physical demand and speculative positioning.

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Today Markets View

Sugar prices remain caught between near-term demand weakness and longer-term supply risks.

October NY Sugar #11 recovered to 17.52 cents per pound, while December London White Sugar settled at approximately $503.20 per tonne.

The market’s recent decline has been reinforced by the unusually large 499,350 MT delivery against the expired October London contract, suggesting that physical demand and available supply remain important concerns.

However, the longer-term supply picture is becoming more uncertain.

Brazilian production has weakened, Thailand is expected to produce substantially less sugar, Indian monsoon rainfall remains below normal and several major industry forecasts now point toward a global deficit in 2026/27 and beyond.

The major disagreement is over the scale of that tightening.

The ISO forecasts a 200,000-tonne deficit, StoneX expects 1.7 MMT, while USDA forecasts rising global ending stocks.

This leaves sugar traders balancing two competing narratives:

Bullish: Production risks in Brazil, India and Thailand → potential global deficit → tighter export availability

Bearish: Large physical deliveries → weak demand → elevated fund positioning → potential long liquidation

The next major catalysts are Brazilian production and exports, the Brazilian real, Indian monsoon conditions, Thai crop estimates, global physical demand and crude oil prices.

Louis Roche, Analyst, Today Markets

Disclaimer: This market analysis is provided for general informational and educational purposes only and does not constitute investment, financial, trading or other professional advice. Octalas Group Ltd provides this content on behalf of Today Markets and Currency Hedger. Market prices can move rapidly and past performance is not indicative of future results. Readers should conduct their own research and seek independent professional advice where appropriate.