Onome Amuge
Sugar futures rose on Tuesday, lifting off multi-year lows as a weaker dollar and signs of stronger demand helped offset pressure from expectations of ample global supply.
New York October raw sugar contracts gained 0.5 per cent to 16.07 cents per pound, reaching a four-week high. December London white sugar futures added 1.3 per cent to $468.90 per tonne, their highest level in a week and a half.
The uptick followed news that Pakistan, a significant importer, has placed orders for 320,000 metric tonnes of sugar for immediate delivery, signalling stronger short-term demand. The weaker dollar, which makes dollar-denominated commodities more affordable for buyers using other currencies, also lent support.
The gains came just a week after New York sugar futures hit their lowest levels in more than four years, with London contracts reaching their weakest since 2020. Prices have been under sustained pressure from forecasts of abundant supply, particularly in Brazil and India.
Brazil’s cane industry group Unica reported this month that sugar output in the country’s key Centre-South region jumped 18 per cent year-on-year in the second half of August to 3.87mn tonnes, as mills allocated more cane to sugar rather than ethanol production. Yet cumulative production for the 2025/26 season through August is still down 1.9 per cent on last year at 26.76mn tonnes.
India, the world’s second-largest producer, also looms large over the market. Monsoon rainfall this season was 8 per cent above average, the strongest in five years,raising expectations of a bumper crop. Sugar trader Sucden said Indian mills could export as much as 4mn tonnes in 2025/26, double earlier forecasts.
The International Sugar Organization (ISO) expects a modest deficit of 231,000 tonnes in 2025/26, its sixth straight year of global shortfalls, but far smaller than the 4.9mn-tonne deficit recorded in 2024/25. Other analysts are more bearish. This is as StoneX projected a surplus of 2. millionn tonnes, while commodities house Czarnikow has forecast a surplus of 7.5mn tonnes, the largest in eight years.
The US Department of Agriculture, in its May report, estimated that global production would hit a record 189.3mn tonnes in 2025/26, up nearly 5 per cent year-on-year, with ending stocks rising 7.5 per cent to 41.2mn tonnes.
Market participants say sugar is likely to remain volatile as traders weigh the immediate boost from import demand against the looming supply wave from major producers.
