US sugar futures climb above 17 cents, hit over 1-year high

US sugar futures extended their recent gains climbing above 17 cents per pound to their highest level since May 2025.

The market remains supported by prospects of a tighter global supply, with the strongest El Niño in decades adding to production risks.

Analysts are increasingly expecting reduced supplies in the 2026-27 season that starts in October, with the global shortfall potentially widening further in the 2027-28 season on lower cane and beet plantings.

India, the European Union, and Thailand are among the regions identified as most vulnerable to adverse weather conditions.

At the same time, elevated oil prices could encourage cane diversion to ethanol production in major producers like Brazil.

The country raised its mandatory ethanol blend to 32% in late July from 30% a month earlier and 27% a year earlier, potentially reducing sugar availability.

Meanwhile, India is considering lowering its sugar import duty.until end-October to bolster supplies and curb record prices.