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Insight Focus
US sugar market firms after Brazil tariff announcement. Buyers are mostly covered for 2025-26, cautiously eyeing 2027 prices amid ample supply and existing stockpiles. Deliveries for 2024-25 strengthen as crop conditions shift, with steady beet and improving cane ratings across key states.
US Cash Sugar Market Firms on Tariff News
Trading in the US cash sugar market perked up during the week ending August 8 for forward periods, spurred mainly by the implementation of a 50% levy on all Brazilian imports, including sugar. Prices were unchanged but had a slightly firm tone.
Sales for 2025-26 extended, and most buyers were currently about 75% covered. Some were even starting to ask about 2027 pricing. Ideas were that prices for next year may have bottomed, but upside potential was limited due to abundant supplies. Users may still have to work through excess stocks from the 2024 crop in the 2025-26 marketing year (beginning October 1) in addition to production from this year’s crop.
The scenario was keeping a fragile lid on both 2026 and 2027 prices, despite the recent pop of strength from tariffs and social media rhetoric from President Donald Trump.
On July 30, President Trump imposed a 50% tariff on Brazilian imports two days ahead of the proposed August 1 deadline. Brazil is the world’s leading sugar supplier and a major supplier to the US. President Trump said the tariff was an act of retribution against Brazil for its prosecution of former Brazilian president and Trump ally Jair Bolsonaro, who is currently under house arrest for allegedly planning a coup to remain in office.
The current president of Brazil, Luiz Inácio Lula da Silva, requested a meeting with the World Trade Organization to discuss the lawfulness of the US tariffs but has said he “won’t call Trump” to discuss the situation.
While the tariff talk has certainly generated ideas that a floor has been established under domestic prices for both beet and cane sugar supplies, world raw sugar values continue to slide lower. The gap between the No. 11 and No. 16 prices may be wide enough to absorb high tariff rates on imports, but the trade seems unwilling to narrow the gap, especially as the talk of forfeitures remains front of mind for several US operations.
Deliveries Steady as Crop Conditions Shift
Deliveries of contracted sugar for 2024-25 remained steady for most processors and were much improved from recent periods. Some beet processors reported strong deliveries and expected the trend to continue through the third quarter as companies prepare for the fall and winter holiday period. Sugar beet condition ratings were mostly unchanged from a week earlier.
Conditions in Colorado declined again, dropping to 64% good-to-excellent, down from 66% previously. Michigan ratings also were lower at 88% good-to-excellent, down from 92% the week before.
Louisiana sugar cane ratings improved after dropping the previous week. As of August 3, the state’s sugar cane crop was rated 83% good-to-excellent, up from 81% a week earlier.
The corn sweetener market remained quiet, with contracting expected to begin in August.
