Insight Focus
US sugar forward sales increase despite soft demand. Buyers moved to secure supply as tariff risks, energy-linked volatility, and El Niño concerns lifted upside pressure. Meanwhile, USDA forecasts slightly lower global output led by Brazil’s ethanol shift, with mixed US crop conditions offering limited near-term disruption.
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Forward sales of bulk refined sugar were brisk this week. Prices for 2026–27 were left unchanged, but the market was firm. Sellers enforced tight deadlines on offers, and buyers felt compelled to push months of uncertainty aside to lock in rates.
Market fundamentals have not changed dramatically. Demand remains soft, the use of GLP-1s continues to have an impact, the domestic crop was progressing, and there is still a surplus supply of sugar in the world. However, external influences supported the idea that there were more upside risks to the market, overriding present and typically bearish factors.
Policy Moves, Energy Prices and El Niño Add Bullish Pressure
One element is the potential for additional duties on sugar imports, which some have suggested may be as high as 10c/lb for raw sugar and 20c/lb for refined supplies, on top of already lofty high-tier duties. The Office of the US Trade Representative (USTR) is conducting a Section 301 investigation to determine whether certain countries are overproducing commodities due to government subsidization. It is expected that the USTR will complete its investigation and propose remedies sometime this summer.
The USTR recently recommended imposing a 25% Section 301 tariff on most imports from Brazil, including high-tier sugar. Written public comments regarding this proposal are due July 1, with a public hearing at the International Trade Commission scheduled for July 6. While the tariffs, if enacted, will only be applied to cane sugar imports, the view is that domestic beet sugar values likely will follow cane sugar prices higher.
Another driver supporting prices was the volatility in the global sugar market. No. 11 raw sugar futures prices have been “at the mercy of energy markets,” according to one trade source. Higher energy prices are bullish for the global sugar market, as many sugar-producing countries can divert their sugar cane crush toward ethanol production, which limits sugar output.
A third factor underpinning sugar prices was the developing El Niño weather pattern, which was expected to bring drier-than-normal conditions in Southeast Asia. Meteorological reports in India forecast a diminished monsoon season, which might stress the sugar cane crop and reduce yields in the world’s second-largest sugar-producing country.
Global Output Falls as Brazil Shifts to Ethanol
The USDA, in its bi-annual Sugar: World Markets and Trade report, projected 2026–27 global centrifugal sugar production at 184.9 million tonnes, raw value, down 1.2 million tonnes, or 0.6%, from 186.1 million tonnes estimated for 2025–26. The reduction was mainly attributed to lower output in Brazil, the EU, Thailand and the US. Production in Brazil was projected at 42.5 million tonnes, down 3% from 2025–26 due to a shift in crush toward more ethanol (sugar/ethanol mix at 48%/52%) in 2026–27.
Source: USDA
Sugar beet planting was nearly complete as of May 31, with only Colorado at 97% and Wyoming at 95% still reporting progress below 100%, the USDA said. Industry focus shifted to crop condition ratings, especially with dryness reported in some key areas. Condition ratings varied widely, from just 7% good in Colorado (93% fair) to 100% good to excellent in Minnesota, the nation’s top sugar beet-producing state.
Good-to-excellent ratings were above a year ago in the Red River Valley (Minnesota and North Dakota) but were below a year ago in all other reporting states (Idaho, Michigan, Colorado and Wyoming).
The Louisiana sugar cane crop was rated 70% good to excellent on May 31, nearly unchanged from a week earlier and compared with 56% good to excellent at the same time last year.
The domestic corn sweetener market was mostly routine.
