Sugar prices rise as El Nino rains raise supply concerns

what happened

Raw sugar futures on ICE climbed sharply on Monday, nearing the 19-month high reached last week, Newsmetry API reported. The contract settled 0.6 cent, or 3%, higher at 20.85 cents per lb after touching 21.24 cents. Brazil observed a national holiday, leaving the country’s sugar and coffee selling activity subdued.

Green Pool analysts said record El Nino-linked rainfall in September, along with more rain expected in October, highlighted the market’s reliance on Brazilian output and exports. Reports also pointed to waterlogged cane. S&P Global Energy expects Brazil’s sugar production in the second half of September to have dropped 14% year-on-year to 2.7 million tons. White sugar gained 3.4% to $560.70 a metric ton.

The outlook outside Brazil has also deteriorated. The United States Department of Agriculture cut its 2026/27 EU sugar production forecast by 8% after this summer’s drought and reduced its US forecast by 0.8% to the lowest level since 2019/20. Arabica settled 3.65 cents, or 1.3%, higher at $2.906 per lb, while robusta rose 0.2% to $3,478 a ton. London cocoa added 33 pounds, or 0.8%, to 4,279 pounds per ton, and New York cocoa rose 0.2% to $5,676 a ton.

why it matters

Weather-related supply risks are affecting several agricultural markets at once. Sugar is supported by concerns over Brazilian output and weaker forecasts elsewhere, while cocoa remains constrained by expectations of a large global surplus in 2025/26 despite risks to the 2026/27 crop.

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