ICE Sugar Futures Decline on Strong Dollar, Global Deficit Outlook Limits Losses
ICE sugar futures fell on Thursday, primarily pressured by a stronger US dollar, which makes dollar-denominated commodities less attractive. However, a revised forecast by Czarnikow for the 2026/27 global sugar balance, shifting from a surplus to a deficit due to Brazilian mills prioritizing ethanol production, helped to mitigate further price declines.
Sugar futures on the Intercontinental Exchange (ICE) closed lower on Thursday. The October contract saw a 0.35% decline, settling at 14.34 cents per pound. The front-month July contract experienced a larger drop of 0.9%, closing at 13.79 cents per pound. According to Barchart, the market was primarily influenced by the appreciation of the US dollar, which reached its highest level in nearly two months. A stronger dollar typically diminishes the competitiveness of commodities traded in the US currency, thereby exerting downward pressure on sugar prices.
Despite the day's decline, sugar prices managed to rebound from their intraday lows, largely due to a revised outlook from consultancy Czarnikow. The firm significantly adjusted its projection for the 2026/27 global sugar balance, shifting from an anticipated surplus of 1.4 million tonnes to a slight deficit of 10,000 tonnes. This revision reflects expectations that Brazilian mills will allocate a larger portion of their sugarcane to ethanol production rather than sugar. Rising international oil prices make ethanol production more attractive, which could lead to constrained global sugar supplies and provide underlying support for prices.