ICE Sugar Prices Advance Following Oil Price Surge

Raw sugar futures on the ICE exchange rose on Monday, driven by higher oil prices and market concerns over a strong El Niño weather event. Crude oil prices surged due to geopolitical tensions, which typically encourages sugar mills to produce more ethanol over sugar. Additionally, India's forecast for reduced rainfall due to El Niño further fueled supply worries.

Raw sugar futures traded on the Intercontinental Exchange (ICE) rose on Monday, driven by surging oil prices and traders' concerns over an anticipated strong El Niño weather event. The July raw sugar contract closed up 0.39 cents, or 2.8%, at 14.45 cents per pound, having hit its lowest value since late April last Thursday. Oil prices rose sharply following increased tensions between Iran and the United States, and after Israel ordered troops to advance further into Lebanon. Higher energy prices are considered 'bullish' for sugar, as they often incentivize cane mills to produce more fuel ethanol and less sugar. India has predicted an El Niño-weakened monsoon in 2026 that could bring the lowest rainfall in 11 years. Brokerage ADMIS stated, 'If the forecast materializes, it will be the weakest monsoon since 2015. The trade is watching monsoon developments for their possible effects on India's cane production.' Meanwhile, the most active white sugar contract rose 2.7% to $450 per tonne.