Raw Sugar Prices Hit One-Month Low Amid Focus on Ample Supply

ICE raw sugar futures hit a one-month low on Friday, heading for a 7% loss for the week. Investors are primarily focused on the ample supply, temporarily setting aside the impact of rising energy prices and geopolitical conflicts. Traditionally, higher oil prices are bullish for sugar, as they can incentivize cane mills to divert production from sugar to ethanol. However, oil prices fell sharply this week amid ceasefire talks, failing to provide support for sugar prices. Specifically, the May raw sugar contract closed down 0.17 cents, or 1.2%, at 13.75 cents per pound, marking its lowest value since early March. Brokerage StoneX commented, "The market remains more sensitive to its own supply and demand balance than to external factors." They added, "Sugar continues to show weakness, as during the recent (futures market) recovery, the export premium (for physical sugar) in Santos did not follow suit. On the contrary, it decreased." China, the world's second-largest sugar importer, raised its 2025/26 sugar production forecast by 800,000 tonnes from the previous month to 12.5 million tonnes, further contributing to concerns about oversupply. Looking ahead, supplies could become tighter as the U.S. climate prediction center has forecast a 61% chance of an El Niño weather phenomenon developing between May and June 2026 and expected to persist.