Global sugar prices rise to 5.5-month high amid rising oil prices

Global sugar prices, after falling to a five-year low in February, rose 9-13% in March to their highest in five-seven months, on the back of a 50% surge in oil prices triggered by the Iran war. They are also supported by supply disruptions caused by the closure of the Strait of Hormuz, which Covrig Analytics estimates has cut global sugar trade by about 6% and reduced refined sugar production.

 

The main driver of the increase in sugar prices was the intention of Brazilian producers to increase the processing of sugarcane into biofuels, reducing the share of sugar production. According to Unica, the share of cane directed to sugar production in 2024/25 MY was 48.15%, and in 2025/26 MY increased to 50.78%.

 

During the week, May futures for cane sugar No. 11 in New York rose by 7% to a 7-month high of $15.86/lb or $350/t (+8.8% for the month, -16.6% for the year), and for white sugar No. 5 on the London Stock Exchange - by 8.7% to $462.5/t (+13% for the month, -12.5% ​​for the year).

 

In Ukraine, sugar prices also remain under pressure from a global decline in demand, although they have now risen to UAH 19,000–21,000/t, and may continue to rise on forecasts of a sharp reduction in sugar beet sowing areas due to low profitability and high costs per hectare.

 

Recall that experts expect the sugar surplus on the world market to remain in the 2025/26 MY.

 

USDA FAS analysts predict that in the 2025/26 MY, sugar production in Brazil will increase by 2.3% compared to the previous season to a record 44.7 million tons, in Thailand - by 2% to 10.25 million tons, and in India - by 25% to 35.25 million tons due to favorable monsoon rains and an increase in sown areas.