Sugar futures close lower in New York and London as crude oil retreats
Raw sugar for October settled 58 points lower at 18.15 cents per pound in New York, while London white sugar fell 152 points to $523.10 per tonne, pressured by a drop of more than 2% in crude oil. The pullback reversed part of Thursday's gains, when oil rose 6.7%. Deficit forecasts from the ISO, StoneX and Czarnikow, plus a projected 17% fall in Thai output, keep the supply side supportive.
Sugar futures closed lower on the New York and London exchanges on Friday, 11 September, pressured mainly by a drop of more than 2% in crude oil, Notícias Agrícolas reported. The decline gave back part of the gains recorded on Thursday, when oil advanced 6.7% and reached its highest level in three and a half months.
In New York, the October raw sugar contract settled 58 points lower at 18.15 cents per pound. In London, October white sugar fell 152 points to $523.10 per tonne.
The ethanol link
The transmission from crude oil to sugar runs through ethanol. Weaker oil reduces the competitiveness of ethanol against fossil fuels and, with it, the incentive for mills to direct a larger share of their cane to biofuel production.
In practice, a softer oil scenario can push more raw material toward sugar, raising product availability and weighing on international quotations. Thursday's rally worked in the opposite direction, supporting sugar by reinforcing the prospect of higher ethanol output at the mills.
Supply fundamentals remain supportive
Despite the session's losses, the market still finds support in expectations of lower Thai production. Thai Sugar Millers Corp projected this week that the country's sugar output in 2026/27 could fall 17%, to approximately 10 million tonnes. Thailand is the world's second largest sugar exporter, and a smaller crop tends to reduce availability on the international market.
- The International Sugar Organization (ISO) projects a global deficit of 200,000 tonnes in 2026/27, after an estimated surplus of 1.1 million tonnes in 2025/26.
- Covrig Analytics estimates a negative balance of 300,000 tonnes for 2026/27.
- StoneX projects a deficit of 1.7 million tonnes for the same season.
- Czarnikow forecasts a wider deficit of 2.9 million tonnes in 2027/28, with global production of 177 million tonnes, down 0.7% from the previous cycle, citing possible climate impacts and reduced cane and beet planting in important producing regions.
India moves from exporter to buyer
The situation in India remains closely watched. According to the country's meteorological department, cumulative monsoon rainfall between June and September was 15% below average as of 9 September. That is an improvement on the 42% shortfall recorded through 30 June, but India's Ministry of Earth Sciences has warned that this year's monsoon season could be the weakest in 11 years.
India is the world's second largest sugar producer and traditionally a significant presence in export flows. In August the government authorised the duty-free import of up to 1 million tonnes of raw sugar until 31 October. The measure raises the prospect of greater availability on the Indian domestic market while reducing the likelihood that the country will have large volumes to ship abroad.
Brazil and the weather variable
In Brazil, the world's largest sugar producer, lower output in the Centre-South is helping to cap global supply. According to Unica, sugar production in the region fell 26.3% in June, to 3.903 million tonnes.
Weather also remains on the radar. The possibility of a strong El Niño is adding to concerns over sugar production, particularly because of the risk of reduced rainfall in important growing areas. Brazil, India and Thailand are among the regions that could be affected, keeping the market focused on climate conditions in the months ahead.
