(Sept 10): Raw sugar futures extended gains to the highest since March 2025, as strong Indian import demand and delays to crushing in top grower Brazil added to concerns over tighter supplies.

The market has been focused on how much India may import to boost its supplies, and the country opened a tax-free quota in August after domestic sugar prices rose to a record high. It marks a rare step by the nation, which ranks as the world’s second-biggest producer of the crop.

Indian mills have sought approvals to bring in almost 800,000 tonnes of raw sugar since the government opened the import quota. The figure, announced by Ashwini Srivastava, joint secretary for sugar in the food ministry, represents about 80% of the total allowance. Refiners have requested to sell domestically another 265,000 tonnes that was previously intended for re-export, he said at the India Sugar & Bio-Energy Conference in New Delhi.

Futures rose as much as 1.6% in New York, and are up almost 3% so far this week.

Raw sugar has surged about 30% this year as the outlook shifts from a surplus to a shortage in the 2026-27 season. The International Sugar Organization forecasts a global deficit of about 260,000 tons in the coming season, with a strengthening El Niño expected to weigh on harvests in Asia.

The weather phenomenon is linked to dryness in India. Rainfall during the country’s monsoon season that ends this month — which the sugarcane crop relies on — is running about 15% below normal levels.

Elsewhere, heavy rains in Centre-South Brazil are disrupting crushing, with more rain forecast across key producing areas in São Paulo state, StoneX analyst Rafael Crestana wrote in a note. Surging oil prices are also lending some support to sugar, as it could incentivize mills to divert more cane to ethanol production, limiting output of the sweetener.

Uploaded by Magessan Varatharaja