U.S. Sugar #11 futures advanced 3.1% in midday trading to 17.4 cents per pound, reaching a fresh 52-week high of 17.59 cents. The October contract climbed to its highest level in over a year, driven by tightening global supply rather than broader market sentiment, as U.S. equities slipped during the same session.
The rally follows a surge in India’s domestic sugar prices, which have climbed nearly 20% since early August amid festival-season demand and depleted inventories. India’s government is considering eliminating its 100% sugar import duty, highlighting an acute domestic shortage. Contributing factors include a decline in sugarcane cultivation area, inadequate rainfall, and insufficient crop maturity, which has made early crushing for the 2026/27 season unlikely.
In Brazil, the world’s largest sugar exporter, mills diverted sugarcane toward ethanol production after the government raised the mandatory ethanol blend to 32%. Data from the country’s center-south region showed sugarcane crushing fell 8.4% and sugar production dropped 17.6% in the second half of July compared with the prior year.
Commodity forecasters have revised their outlook for the 2026/27 global sugar balance from a surplus to a deficit. Analysts at Covrig Analytics, Green Pool Commodity Specialists, and StoneX cited these supply constraints as the primary drivers of the market’s upward momentum.
