Sugar Prices Surge 30% in Five Weeks, Reaching Highest Level Since April 2025

Sugar prices have risen almost 30% in just five weeks, reaching 18.15 cents per pound on Thursday – the highest level since April 2025. The rally began on August 3, when prices were 13.97 cents per pound.

Key Drivers of the Rally

• Shift to Ethanol Production: Brazilian mills are diverting cane from sugar to ethanol, reducing sugar output.
• Rising Energy Costs: Brent crude near $94 a barrel and ongoing Hormuz disruptions keep fuel prices high, making ethanol more attractive.
• Indian Import Policy: India lifted a ban and allowed duty‑free raw sugar imports of up to 1 million tonnes through October 31, its first large purchase since the 2017‑18 season.

Supply Outlook

Center‑South Brazil’s sugar output fell 26.3% year‑over‑year in June, according to UNICA. Forecasts now show a global deficit: Green Pool projects a 3.2 million‑tonne shortfall for 2026/27, while StoneX expects a 1.7 million‑tonne gap. Earlier expectations of surpluses have been revised, and a second shortfall is anticipated for 2027/28.

Technical Perspective

The weekly chart shows sugar breaking above the 0.236 Fibonacci level at 15.58 cents in August, with current price near the 0.5 retracement at 18.28 cents. A close above this level could expose resistance at 19.48 cents (0.618 retracement) and further at 21.20 cents (0.786). Support lies at 17.08 cents (0.382 retracement), with deeper correction testing 15.58 cents.

Market Sentiment

Trading volume has risen sharply over the past three weeks, and the weekly RSI is at its highest since April 2023, indicating strong bullish momentum. Managed money net long contracts reached 207,100 in late August – a two‑year high after being net short in May – though crowded positioning could increase reversal risk.