Sugar hits 19-month high as Brazil rains threaten output

ICE raw sugar futures climbed to a 19-month high on October 6. Prices reached 20.90 cents/lb during the session and were trading at 20.75 cents/lb by 11:00 GMT, up 0.1% from the previous close.

The main support came from forecasts for more rain in Brazil over the next two weeks. Wetter weather could delay cane crushing and push sugar production in the country’s Centre-South region below 38 mln tons.

Expectations for Brazilian output have deteriorated noticeably in recent months. A Reuters poll in late July had put the consensus forecast at around 40 mln tons, meaning current estimates are already at least 2 mln tons lower.

White sugar prices also rose, gaining 0.6% to $551/t and touching $553/t during the session, the highest level since late August. The market is also being supported by expectations that Germany’s beet sugar production will fall to 3.33 mln tons in the MY 2026/27 from 4.421 mln tons a season earlier.

At the same time, traders say physical demand remains weak, and some market participants believe the recent rally has gone too far. This could limit further gains unless weather risks in Brazil intensify.

Tags: Brazil, prices, sugar, futures, global market, weather conditions