October NY world sugar #11 (SBV26) on Wednesday closed down -0.03 (-0.20%), and Aug London ICE white sugar #5 (SWQ26) closed up +4.70 (+0.99%).
Sugar prices settled mixed on Wednesday, with NY sugar falling from a 1.75-month high. An improvement in India’s monsoon rains sparked long liquidation in sugar futures on Wednesday after India’s Meteorological Department reported that India’s cumulative monsoon rainfall was 15% below normal as of July 8, a substantial improvement from 42% below normal on June 30.
Sugar prices found support on Wednesday from the +4% surge in WTI crude oil prices (CLQ26). Stronger crude prices benefit ethanol prices and could persuade the world’s sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies.
Sugar prices have rallied sharply over the past two weeks, with NY sugar posting a 1.75-month high on Wednesday and London sugar posting a 10-month high on Tuesday. Sugar prices have climbed amid concerns that weak monsoon rains in India will lower sugar yields and reduce the country’s sugarcane harvest, the world’s second largest. India’s Meteorological Department reported today that India’s cumulative monsoon rainfall was 15% below normal as of July 8. India’s Earth Science Ministry warns that this year’s monsoon in India could be the weakest in 11 years. India’s monsoon season runs from June through September.
As a bullish factor, Unica reported on June 22 that 2026/27 Brazil Center-South sugar production through May is 6.838 MMT, down -2.0% y/y as millers ramped up ethanol production. The percent of sugarcane used for sugar by Brazil’s sugar mills dropped to 41.42% from 50.09% as cane crushing for ethanol production rose to 58.38% from 49.91% last year. Also, sugar trader Czarnikow on June 11 cut its global 2026/27 sugar balance estimate from a surplus of 1.4 MMT to a deficit of -100,000 MT, as Brazil’s sugar mills produce more ethanol than sugar amid the recent surge in crude oil prices.
