Sugar futures are entering Monday’s trading session under pressure after New York raw sugar extended its three-week decline, falling to a five-week low on Friday. London white sugar also weakened to a three-month low before pre-weekend short covering helped the market recover, allowing the December contract to finish higher.
March 2027 New York Sugar No. 11 (SBH27) closed down 0.32 points, or 1.72%, while December 2026 London ICE White Sugar No. 5 (SWZ26) finished up 2.30 points, or 0.46%.
The contrasting settlements highlight a market struggling to establish a clear direction. Stronger Indian production, expectations of increased Brazilian export selling and concerns about global supply are weighing on prices. However, adverse weather risks in Brazil, India and Thailand, alongside forecasts for tighter global balances in coming seasons, continue to provide underlying support.
As trading resumes on Monday, attention will focus on whether New York sugar extends its decline or whether the short-covering seen in London develops into broader buying interest.
Sugar Market Snapshot
| Market indicator | Latest reading |
|---|---|
| March 2027 NY Sugar No. 11 | SBH27 |
| NY Sugar Daily Change | -0.32 points (-1.72%) |
| December 2026 London White Sugar No. 5 | SWZ26 |
| London Sugar Daily Change | +2.30 points (+0.46%) |
| NY Sugar Recent Low | 5-week low |
| London Sugar Recent Low | 3-month low |
| India Sugar Production to End October | 845,000 MT |
| India Sugar Carry-over | 3.6 MMT |
| Brazil Cane Crushed, First Half October | 32 MMT |
| Brazil Sugar Production, First Half October | 2.15 MMT |
| Covrig 2026/27 Global Deficit Forecast | 490,000 MT |
| ISO 2026/27 Global Deficit Forecast | 200,000 MT |
| ISO 2025/26 Global Production | 182 MMT |
| USDA 2026/27 Global Production Forecast | 184.854 MMT |
| USDA 2026/27 Global Consumption Forecast | 179.991 MMT |
Friday’s Sugar Close: New York Falls While London Recovers
Sugar futures extended their three-week decline on Friday, with New York raw sugar falling to its lowest level in five weeks and London white sugar reaching a three-month low.
March 2027 New York Sugar No. 11 (SBH27) settled 0.32 points lower, representing a decline of 1.72% on the session.
December 2026 London ICE White Sugar No. 5 (SWZ26), however, recovered from its session lows as pre-weekend short covering lifted prices. The contract closed 2.30 points higher, gaining 0.46%.
The divergence between the two markets suggests that selling pressure remains more pronounced in New York, while London’s recovery indicates that some traders were reluctant to maintain short positions into the weekend.
Nevertheless, both markets remain under pressure from the broader three-week decline.
What Traders Should Watch at Monday’s Open
Monday’s opening session will provide an important indication of whether the latest selling pressure is continuing or whether short covering can support a broader recovery.
New York sugar’s 1.72% decline is the more bearish signal from Friday’s close. Traders will be watching whether March 2027 futures attract further selling or begin to stabilise following the five-week low.
London white sugar’s 0.46% advance offers a more constructive starting point, although the recovery followed a decline to a three-month low. The market will need to demonstrate sustained buying interest to suggest that Friday’s short covering is developing into a more durable recovery.
Three major factors are likely to influence early trading:
- Indian production: The substantial increase in early-season production is reinforcing expectations of greater global availability.
- Brazilian export competitiveness: The weaker Brazilian real could encourage exporters to sell more sugar into international markets.
- Weather-related production risks: Persistent El Niño concerns and rainfall disruption could constrain output across major producing regions, providing support to prices.
The market is therefore approaching Monday with conflicting fundamental signals. Increased production and potential export selling are weighing on prices, while the possibility of weather-related supply disruption remains a longer-term supportive factor.
India Sugar Production Surges as New Season Begins
Stronger Indian sugar production is one of the most significant bearish influences on the current market.
India’s National Federation of Cooperative Sugar Factories Ltd. reported that production reached 845,000 metric tonnes by the end of October, more than eight times the volume produced during the same period last year.
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) also reported that the 2026/27 sugar season began on schedule, with nearly 107 sugar mills commencing crushing operations.
India is entering the new season with an estimated 3.6 million metric tonnes of sugar carried over from 2025/26. ISMA described the country’s availability position as comfortable, suggesting that domestic supplies are sufficient to meet near-term requirements.
However, India’s recent monsoon rainfall was 12.6% below normal between June and September, representing the weakest monsoon performance in 11 years.
This creates a more complicated production outlook. Strong early-season output and carry-over stocks are currently weighing on prices, but the rainfall deficit could become a concern if it affects future crop development and production.
For Monday, the immediate market focus remains on the significant increase in early-season output and what this means for India’s export availability.
Brazilian Real Weakness Could Increase Sugar Export Selling
Brazil remains a critical influence on the international sugar market, accounting for approximately 23% of global sugar production and more than 50% of worldwide sugar exports, according to the USDA.
The Brazilian real fell to a 10.5-month low against the US dollar last Monday following President Luiz Inácio Lula da Silva’s unexpected presidential election victory.
A weaker real can make dollar-denominated sugar exports more attractive to Brazilian producers by increasing the domestic currency value of their international sales.
This creates a potentially bearish influence for sugar futures. If Brazilian mills and exporters accelerate selling, additional supply could enter the international market and place further pressure on prices.
The currency relationship will therefore remain important during Monday’s session, particularly if the real remains weak against the dollar.
Brazil Weather Disruptions Restrict Sugarcane Crushing
Despite the potential for increased Brazilian export selling, adverse weather conditions are creating difficulties for sugarcane processing.
Persistent El Niño-related rainfall across Brazil has slowed harvesting and crushing operations. Forecasts for the country’s sugarcane belt over the following seven days indicate that wet conditions could continue to disrupt mill activity.
Brazilian mills crushed 32 million metric tonnes of sugarcane during the first half of October, down 18% from 39 million tonnes during the comparable period last year.
Sugar production also declined significantly. Brazilian output during the first half of October fell 23% year-on-year to 2.15 million metric tonnes.
These reductions provide an important counterweight to the bearish supply outlook created by stronger Indian production.
If rainfall continues to restrict harvesting and crushing, Brazilian output could remain under pressure, potentially limiting the amount of sugar available for export.
Global Sugar Balance: Deficit Forecasts Offer Longer-Term Support
Although immediate price action remains bearish, several industry forecasts point towards tighter global sugar balances in coming seasons.
Covrig Analytics recently increased its estimate for the 2026/27 global sugar deficit to 490,000 metric tonnes, compared with its previous forecast of 300,000 tonnes issued in August.
The organisation also revised its 2025/26 balance, reducing its estimated global surplus to 1.2 million tonnes from 5.2 million tonnes. The adjustment reflected lower Brazilian production and higher Indian sugar imports.
The International Sugar Organization (ISO) has also forecast that global sugar production will decline by 1% year-on-year in 2026/27 to 180.1 million tonnes.
The ISO expects the market to move into a deficit of approximately 200,000 tonnes, with potential El Niño-related production disruptions in India and Thailand contributing to the tighter outlook.
These forecasts suggest that the current price weakness may be occurring against a potentially more supportive medium-term supply outlook.
However, traders will need to distinguish between projected deficits and actual production and export developments as the season progresses.
El Niño Risks: Brazil, India and Thailand Remain in Focus
Weather remains one of the most important longer-term variables for the global sugar market.
A developing Super-El Niño could disrupt rainfall patterns across Brazil, India and Thailand, three of the world’s largest sugar-producing countries.
In Brazil, excessive rainfall has already affected harvesting and crushing operations in the Center-South region.
Datagro has forecast that Brazil’s Center-South sugar output could decline by 5% to 38.4 million tonnes during 2026/27, reflecting potential El Niño-related production challenges.
India and Thailand also face potential production risks if rainfall patterns become less favourable.
The ISO’s outlook for lower global production in 2026/27 reflects these concerns, although the eventual impact will depend on the severity, duration and geographical distribution of weather disruptions.
For sugar traders, weather developments could become increasingly important if current production expectations begin to deteriorate.
India Allows Tax-Free Sugar Imports
India’s decision to permit tax-free imports of raw sugar provides another indication of changing supply dynamics.
The Directorate General of Foreign Trade initially announced on August 20 that India would allow up to 1 million metric tonnes of raw sugar imports without duty until October 31.
On October 22, the deadline was extended to December 31.
The decision is notable because India is traditionally a sugar-exporting country and has not imported substantial quantities since the 2017/18 season.
The import allowance suggests that domestic supply requirements remain an important consideration despite the increase in early-season production.
For the international market, Indian imports could provide an additional source of demand, potentially offsetting some of the bearish pressure from stronger domestic production and carry-over stocks.
2026/27 and 2027/28 Sugar Production Outlook
The longer-term supply picture remains mixed, with forecasts pointing towards lower production in several major producing countries.
The USDA’s May biannual report projected global sugar production for 2026/27 at 184.854 million metric tonnes, representing a 6.5% decline from the previous record estimate of 186.056 million tonnes for 2025/26.
Global human sugar consumption is expected to increase by 0.4% year-on-year to a record 179.991 million tonnes.
However, the USDA also forecast that global ending stocks would increase by 2.0% to 44.410 million tonnes, highlighting that production declines do not necessarily translate into an immediate shortage of available sugar.
The USDA Foreign Agricultural Service projected the following production figures for 2026/27:
| Producing country | 2026/27 production forecast | Annual change |
|---|---|---|
| Brazil | 42.2 MMT | -2.5% |
| India | 29.5 MMT | -1.7% |
| Thailand | 9.5 MMT | -15.6% |
Looking further ahead, Czarnikow has forecast a global sugar deficit of 2.9 million tonnes in 2027/28.
The organisation expects global production to decline by 0.7% year-on-year to 177 million tonnes, with weather disruptions in India, the European Union and Thailand contributing to the reduction.
It also highlighted the possibility that Brazilian mills could allocate more sugarcane to ethanol production rather than sugar, particularly following the recent increase in crude oil prices.
These longer-term projections provide a potential source of support, although the immediate market remains influenced by current production levels, currency movements and export availability.
Bullish Sugar Market Factors
- Potential global production deficits: Covrig Analytics forecasts a 490,000-tonne deficit in 2026/27, while the ISO expects a deficit of 200,000 tonnes.
- Brazilian crushing disruption: Sugarcane crushing fell 18% year-on-year during the first half of October.
- Lower Brazilian sugar output: Production declined 23% year-on-year to 2.15 million tonnes during the same period.
- El Niño weather risks: Potential rainfall disruption across Brazil, India and Thailand could constrain future production.
- Longer-term supply concerns: Czarnikow forecasts a 2.9-million-tonne global deficit in 2027/28.
- Indian import allowance: The extension of India’s 1-million-tonne tax-free raw sugar import allowance could create additional international demand.
Bearish Sugar Market Factors
- Strong Indian production: Output reached 845,000 tonnes by the end of October, more than eight times last year’s level.
- Comfortable Indian availability: Carry-over stocks of 3.6 million tonnes provide a substantial starting supply position.
- Weaker Brazilian real: Currency depreciation could encourage Brazilian exporters to sell more sugar internationally.
- Three-week price decline: New York and London sugar have both experienced sustained selling pressure.
- Record 2025/26 production: The ISO estimates global production reached 182 million tonnes, up 3.5% year-on-year.
- Higher USDA ending stocks: Global 2026/27 ending stocks are forecast to increase by 2.0% to 44.410 million tonnes.
Sugar Price Forecast: What to Expect on Monday
The immediate outlook for sugar remains cautious heading into Monday’s opening session.
New York March 2027 sugar’s 1.72% decline on Friday indicates that selling pressure remains significant. A continuation of weakness would reinforce the current bearish momentum, particularly if the market responds to stronger Indian production and expectations of increased Brazilian export selling.
London December 2026 white sugar offers a slightly more constructive signal after recovering from its three-month low to finish 0.46% higher. Traders will be watching whether this short-covering activity develops into sustained buying interest.
The broader outlook remains dependent on the balance between immediate supply availability and future production risks.
Bearish scenario: Continued Indian production growth, a weaker Brazilian real and increased export selling could keep futures under pressure. Further deterioration in New York prices would suggest that the three-week decline remains firmly in place.
Recovery scenario: Renewed buying interest, continued Brazilian crushing disruptions and growing concern over El Niño-related production losses could support a recovery. London sugar’s positive close provides an early indication that some buyers are prepared to re-enter the market.
The next session will therefore be important in determining whether Friday’s contrasting settlements represent the beginning of stabilisation or simply a temporary pause in the wider decline.
Sugar Market Outlook for the Coming Sessions
Sugar enters the new week with a bearish short-term price structure but a more complicated medium-term supply outlook.
Stronger Indian production, comfortable carry-over stocks and the potential for increased Brazilian export selling are currently weighing on futures.
However, production disruptions in Brazil, the risk of adverse weather across major producing regions and forecasts for global deficits in 2026/27 and 2027/28 provide underlying support.
The immediate direction will depend on whether the market continues to prioritise current supply availability or begins to place greater weight on future production risks.
For traders, Monday’s opening price action in New York and London will be particularly important. The ability of London white sugar to hold its Friday recovery, alongside the direction of New York raw sugar, should provide a clearer indication of near-term market sentiment.
Today Markets Analysis
Sugar’s latest performance reflects a market caught between rising near-term availability and growing concerns about future production.
The three-week decline has been reinforced by India’s stronger early-season output and the possibility that Brazilian exporters will increase selling following the weakness in the real.
However, the reduction in Brazilian sugarcane crushing and the forecasts for tighter global balances suggest that the bearish picture is not without risks.
The most important distinction for the coming sessions is between current production and projected supply. India’s early output is clearly stronger, but weather-related disruption in Brazil and potential production losses across Asia could alter the global balance as the season progresses.
Today Markets will be watching Monday’s opening direction, the response of New York and London futures to the latest supply information, and any further developments in Brazilian weather, currency movements and Indian production.
Currency Hedger View
The Brazilian real remains an important currency variable for the international sugar market.
When the real weakens against the US dollar, Brazilian exporters can receive more local currency from dollar-denominated sugar sales. This can improve export incentives and potentially increase the volume of sugar offered to international buyers.
For sugar importers and businesses purchasing commodities in US dollars, movements in the dollar against their domestic currencies can also influence procurement costs, independently of changes in sugar futures.
Currency Hedger monitors foreign exchange developments and helps businesses understand and manage the impact of currency volatility on international payments and commodity-related transactions.
Manage your currency exposure: Open a Currency Hedger account or visit currencyhedger.com.
Market analysis by Today Markets, with currency and international payments commentary from Currency Hedger.
Risk Disclaimer: This material is provided for informational and educational purposes only and does not constitute investment advice, financial advice, trading recommendations or an offer to buy or sell any financial instrument. Futures and commodities trading involve substantial risk and may not be suitable for all investors. Past performance is not indicative of future results. Market prices and conditions can change rapidly.
