Raw sugar futures on ICE No.11 traded around 14.68-15.0 cent/lb in late July, hovering near three-week lows. The CFD benchmark on Trading Economics settled at 14.68 cent/lb on July 23, roughly 11% below a year ago. The forward curve shows a shallow contango: October 2026 at 14.74 cent/lb, March 2027 at 15.65 cent/lb, rising to about 16.9 cent/lb by March 2029, implying comfortable near-term supply but expectations of moderately tighter balances ahead.
White sugar futures on ICE No.5 in London tell a slightly firmer story: the August 2026 contract around $480-481/ton after firming on European heat and dryness, with the 2026-29 strip mostly in the $465-473/ton range.
The global sugar balance for 2025/26 is in surplus with stocks building. ISO and other forecasters see comfortable supply through the current marketing year, but weather risks for 2026/27 could tighten balances, which explains the firmer forward curve into 2028/29.
Brazil's Center-South region remains the dominant global influence. Final UNICA data for 2025/26 showed 611.15 million tonnes of cane crushed, producing 40.43 million tonnes of sugar and 33.7 billion liters of ethanol. The sugar/ethanol mix for 2025/26 was approximately 49.5% sugar, 50.5% ethanol.
For 2026/27, the story is shifting toward ethanol. The USDA projects 48% sugar, 52% ethanol allocation as international sugar prices fell while domestic ethanol improved profitability. Early data confirms this trend, with only about 33% of cane going to sugar in early April.
UNICA's mid-June data shows CS Brazil sugar output down about 3% year-on-year to 2.31 million tonnes, with continued strong ethanol allocation. Higher oil prices and Brazilian policy supporting biofuels are leading to more cane allocation to ethanol and less sugar availability.
India and Thailand are key variables. India's sugar production for 2025/26 is expected to be strong, though the government maintains export restrictions. Thailand's production has recovered from drought-affected years, adding to global surplus. However, the La Nina transition expected in late 2026 introduces rainfall risks for both producers.
The ethanol-sugar price correlation in Brazil creates a natural floor for sugar prices. With crude oil elevated and Brazilian ethanol prices supported by policy, the breakeven for sugar relative to ethanol currently sits in the 14-15 cent/lb range. Any sustained move below 14 cent/lb would trigger further ethanol allocation, reducing sugar supply and pushing prices back up.
The sugar market is in the late stages of a surplus cycle, with prices trading near the ethanol breakeven floor. For industrial buyers, the current 14.5-15.0 cent/lb range offers a good entry point for forward coverage. The shallow contango means there is no penalty for waiting, but the asymmetric risk (prices at the floor, can only go up) argues for locking coverage on dips below 15 cent/lb. Given the ethanol allocation shift, the floor is well-defined at 13.5-14.0 cent/lb. Cover 12 months of raw sugar needs in three tranches: one third at current levels (14.7 cent/lb), one third on any dip to 14.0 cent/lb, and one third waiting for October UNICA data to confirm the harvest outcome. For refined sugar buyers, the No.5 contract at $480/ton offers a moderate premium over raw, consistent with normal refining margins. Watch the Brazil real exchange rate: a weaker real makes Brazilian exports cheaper and puts downward pressure on ICE prices; a stronger real does the opposite. India export policy is the wild card: if the Indian government allows additional exports beyond current quotas, the surplus could grow and push prices below 14 cent/lb. If they maintain restrictions, the floor holds. The 2026/27 Brazil harvest (April-November) is the next major event. If the ethanol mix holds at 52%+, sugar output will be 1-1.5 million tonnes lower than 2025/26, tightening the global balance in 2027.