Sugar futures retreat after weeks of gains as global supply risks persist

Sugar futures pull back after weeks of gains

Raw and white sugar futures traded lower on international exchanges on Thursday (9), in an adjustment following the sharp appreciation of recent weeks. Despite the retreat, traders continued to monitor the factors that could restrict global supply of the commodity, including weather in the main producing countries and projections for the 2026/27 crop, according to Notícias Agrícolas.

Around 11:00 Brasília time on the New York exchange, the October contract was trading at 15.05 cents per pound, down 6 points. The March/2027 contract fell 4 points to 16.03 cents per pound. In London, the August contract was quoted at US$478.60 per tonne, down 200 points, while the October contract dropped 180 points to US$470.60 per tonne.

Mixed signals in the prior session

In the previous session, contracts closed without a single direction. In New York, prices retreated after improved monsoon rains in India encouraged profit-taking. In London, prices found support from higher oil prices and expectations of a tighter global supply in the next crop. That split highlights how sensitive the market has become to short-term weather shifts even as the medium-term balance tightens.

Czarnikow sees a 600,000-tonne deficit

Market fundamentals continue to support prices. The consultancy Czarnikow revised its projection for the 2026/27 world sugar crop and now estimates a global deficit of 600,000 tonnes, driven mainly by lower output in the European Union.

According to the firm, the intense heat wave across Europe is compromising the development of sugar beet and has reduced the planted area. As a result, the forecast for EU-27 sugar production was cut to 13.9 million tonnes. Although stocks carried over from the previous crop reduce the risk of an immediate shortage, Czarnikow assesses that the market will have less room to absorb potential production losses in other large producing countries over the course of the season.

El Niño keeps traders cautious

Attention also remains focused on global weather. Last week, the United Nations meteorological agency raised its forecast for El Niño to the strong category and warned that the event could develop into a very strong episode in the coming months.

• The phenomenon tends to bring drought and heat to important sugar producers such as India and Thailand.
• It can also favour excessive rainfall during the harvest in Brazil, the world's leading exporter.

Investors continue to track this scenario closely given the potential impact on the world supply of the commodity. For importers and exporters, the combination of a projected deficit, weaker European output and a strengthening El Niño keeps the risk balance tilted toward tighter supply, even as prices ease from their recent highs.