Global Sugar Prices Edge Up on Tightening Supply Forecasts for H2 2026

Global sugar prices have displayed a modest yet consistent upward trend over the past week, primarily fueled by revised forecasts indicating a potentially tighter supply balance for the second half of 2026. Analysts at leading commodity firms attribute this to a combination of factors, including a downward revision in Brazil's Center-South sugarcane crush estimates and persistent logistical challenges in key exporting regions. The International Sugar Organization (ISO) recently updated its outlook, projecting a potential deficit of 1.5 million tonnes for the 2025/26 marketing year, a significant shift from earlier forecasts of a slight surplus. This adjustment has injected renewed bullish sentiment into the market, with benchmark raw sugar futures on ICE Futures US climbing to 21.85 cents per pound for the March 2026 contract. Traders are closely monitoring weather patterns in India, where the monsoon season's performance will be critical for the upcoming harvest, and Thailand, which continues its recovery from earlier drought conditions. While the weakening of the Brazilian Real against the US Dollar has somewhat cushioned the impact for Brazilian exporters, underlying supply concerns remain paramount. Furthermore, rising energy prices are contributing to increased production costs for ethanol, potentially diverting more cane away from sugar production in Brazil. Market participants are now keenly awaiting fresh data from major producers and the outcomes of ongoing trade negotiations that could influence import/export dynamics.