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Sugar Prices Jump on El Niño Fears
18 Jun
Summary
- India's monsoon rainfall is significantly below normal.
- El Niño weather pattern may disrupt sugar production in key regions.
- Global sugar balance shifts from surplus to deficit.
Global sugar markets experienced a price increase, with July New York sugar futures up 0.80% and August London ICE white sugar futures up 1.45% as of June 18, 2026. Early losses were erased as concerns mounted over India's sugar crop. Official reports indicate that India's cumulative monsoon rainfall was 32% below normal as of June 15, 2026.
The emergence of an El Niño weather pattern across the equatorial Pacific is a significant factor, with expectations that it will curb rainfall in Brazil, India, and Thailand—the world's top three sugar producers. Japan's Meteorological Agency confirmed the El Niño's formation last week. The US National Oceanic and Atmospheric Administration (NOAA) estimates a high probability of a very strong El Niño event this year.
Compounding these concerns, sugar trader Czarnikow revised its 2026/27 global sugar balance, forecasting a deficit of 100,000 metric tons, a stark contrast to a previously estimated surplus. This shift is partly attributed to Brazilian sugar mills prioritizing ethanol production over sugar, driven by surging crude oil prices. Official forecasts for Brazil's 2026/27 season indicate a slight decrease in sugar output while ethanol production is set to rise.
