The sugar price has climbed almost 30% in five weeks. It reached 18.15 cents per pound on Thursday, the highest level since April 2025.
The rally started on Aug. 3 from 13.97 cents. Three supply shocks have driven it, while speculative funds have amplified the move.
Why the Sugar Price Is Surging
Brazilian mills have switched cane away from sugar and into ethanol. Brent crude near $94 a barrel makes fuel the better payer, and the Hormuz closure keeps energy costs high. Mills entered the season less than half-hedged, so they moved quickly. Center-South sugar output fell 26.3% year over year in June, according to UNICA.
India has meanwhile turned buyer. New Delhi banned exports in May, then allowed 1 million tonnes of duty-free raw imports through Oct. 31. That is its first sizeable purchase since the 2017-18 season. Domestic prices hit a 16-year high, and the government capped bulk buyers at 15 days of stock.
Forecasters have also flipped the global balance. Green Pool projects a 3.2 million tonne deficit for 2026/27, while StoneX sees 1.7 million tonnes. Covrig Analytics and Czarnikow both expected surpluses in June.
Czarnikow now forecasts a second shortfall in 2027/28. A strong El Niño adds risk to Indian and Thai cane, a threat Goldman flagged in June.
Sugar Price Technical Analysis Eyes 19.48 Cents
The weekly chart tracks a retracement of the slide from 23.38 cents. Sugar broke above the 0.236 Fibonacci level at 15.58 cents in August, turning that band into potential support.
Price now sits at the 0.5 retracement at 18.28 cents. Thursday’s candle tagged 18.58 cents before easing back, so resistance has held on the first attempt.
A weekly close above 18.28 cents would expose the 0.618 retracement at 19.48 cents. That level coincides with the declining 200-week moving average, which reinforces it as resistance. The 0.786 level at 21.20 cents sits above.
On the downside, the 0.382 retracement at 17.08 cents offers first support. A deeper correction would retest 15.58 cents.
Volume has risen sharply over the past three weeks, which suggests conviction behind the breakout. The weekly RSI also sits at its highest reading since April 2023. Momentum, therefore, favors the commodities bulls for now.
Managed money held 207,100 net long contracts in late August, a two-year high, after sitting net short in May. However, crowded positioning could sharpen any reversal.
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