Raw sugar futures climbed to their highest level in 17 months as concerns over global supplies intensified, driven by strong import demand from India and disruptions to sugarcane processing in Brazil.

Raw sugar futures in New York rose by as much as 1.6%, bringing their weekly gain to around 3%. Prices have increased by approximately 30% since the beginning of the year as the outlook for the 2026–2027 season has shifted from a surplus toward a potential deficit.

Stronger Demand from India

India, the world’s second-largest sugar producer, opened a duty-free import quota in August after domestic sugar prices reached record levels. Indian sugar mills have since applied for permission to import approximately 800,000 tons of raw sugar, representing around 80% of the country’s total import quota.

According to Ashwini Srivastava, Joint Secretary at India’s Ministry of Food, refineries have also applied to sell 265,000 tons of sugar that had previously been intended for re-export on the domestic market.

Weather Disruptions Hit Brazil

Heavy rainfall in Brazil’s Center-South region, the country’s key sugar-producing area, has disrupted sugarcane processing. StoneX analyst Rafael Crestana said continued rainfall is expected in important production areas of São Paulo state.

Meanwhile, rainfall during India’s critical monsoon season has been around 15% below normal levels. The strengthening El Niño phenomenon is expected to put further pressure on crops across Asia and is associated with drier conditions in India.

Global Sugar Deficit Expected

The International Sugar Organization estimates that the global sugar market could face a deficit of approximately 260,000 tons in the upcoming season.

Higher oil prices are also supporting sugar prices, as expensive crude oil could encourage sugar mills to divert more sugarcane toward ethanol production, potentially reducing the amount available for sugar production.

Source: Patronlar Dünyası/ Prepared by: İlayda Gök