Insight Focus
US sugar prices stayed firm amid growing crop concerns. Drought stress, delayed harvest prospects and mealybug infestations continued to raise questions over domestic sugar production, while stronger deliveries provided additional market support. Market participants were also assessing new USTR tariffs on imports from 60 countries and the potential implications for sugar trade flows.
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Drought Concerns Support Firm US Sugar Prices
Activity was brisk in the cash sugar market this week, as sellers moved closer to wrapping up 2027 sales. Spot prices remained unchanged but firm, while 2026-27 values were steady to higher. A noticeable uptick in deliveries, along with concerns about the domestic crop, provided support.
While state-reported conditions for sugar beet and sugar cane crops improved from the prior week, ratings in several states remained below year-ago levels, and forecasts indicated hot and dry conditions would prevail across most sugar beet and sugar cane growing areas in the coming weeks.
As of July 28, about 62% of sugar beets were growing in some level of drought, with 6% of areas experiencing exceptional drought, the highest classification. As of July 28, the US Drought Monitor showed that sugar beet growing areas in Wyoming, Nebraska and Oregon were experiencing 100% drought, while 100% of Florida’s sugar cane crop was growing in some level of drought.
Source: US Drought Monitor
The dry weather posed an added challenge for growers anticipating a later-than-normal harvest due to planting delays and replanting necessitated by severe winter weather that damaged early crop stands. Some were not expecting to begin lifting beets until mid- or even late September, a month later than the usual start.
While the US Drought Monitor indicated no drought in Louisiana’s sugar cane crop as of July 28, a different threat emerged with the confirmation of an invasive mealybug in 14 parishes. The pest has caused significant damage, and a Louisiana State University entomologist said some sugar cane fields are unlikely to be harvested this year.
Note: The Drought Severity and Coverage Index (DSCI) measures US drought intensity on a scale of 0 to 500, where 0 means no drought and 500 means exceptional drought across the entire area.
Source: US Drought Monitor
Deliveries Increase as Trade Policy Remains in Focus
Also supporting prices was the pace of deliveries, which has ramped up in recent weeks. One source speculated that sugar users may simply be playing catch-up after taking downtime during the Fourth of July holiday period. Another source suggested that some factories may be undergoing summer maintenance programs, shifting demand to other suppliers, especially since the biggest uptick was in bulk deliveries.
“You can’t call two weeks a trend,” one processor said. “But if this demand holds, then that’s different. If it doesn’t, then it was just a shift. But we have definitely seen it pick up this month (July).”
Market participants processed the latest announcement from the Office of the United States Trade Representative (USTR) regarding its Section 301 investigation into forced labour practices and the agency’s remedial action imposing tariffs of 10% to 12.5% on imports from 60 countries, including major sugar exporters.
While in-quota tariff-rate quota sugar imports from the affected countries would not be subject to the additional tariffs, USTR said over-quota, or high-tier, sugar imports and free-trade agreement quotas would be subject to the Section 301 duties. Participants hoped to hear updates at next week’s International Sweetener Symposium in Vail, Colorado, hosted by the American Sugar Alliance.
The corn sweetener market was routine.
