(Oct 5): Raw sugar futures extended gains, with worries about tighter global supplies mounting because of weather and production concerns across top growers. 

The most-active contract in New York rose as much as 2% to its highest level since Dec 17, 2024. Monday’s session built on last week’s gain of nearly 8%. White sugar also rose. 

The El Niño weather pattern is stirring supply concerns across the agriculture complex, with sugar expected to be among the first crops affected. At the start of the year, a supply glut was widely forecast, but weather risks have flipped that narrative to expectations of a deficit.

“Weather concerns are driving the latest uptick in sugar prices, which are poised to test the August highs,” said Chris Beauchamp, the chief market analyst of investing and trading platform IG.

Excessive rainfall has slowed cane harvesting and crushing in top producer Brazil. In second-biggest producer India, the weakest monsoon since 2015 has reduced projected sugar output to about 30 million tons. In Europe, sugar-beet yields are forecast to be 11% below the five-year average, according to the European Union’s Monitoring Agricultural Resources unit. 

While weaker output in one region can typically be offset by stronger production elsewhere, adverse conditions across several key growers at the same time could erode that buffer.

“It seems the market is convinced that sugar will fall well short of early and recent estimates,” Green Pool Global analysts wrote in a note on Monday, cutting their Central-South Brazil 2026/27 sugar output forecast by 3%. 

Money managers became more bullish on raw sugar as they unwound bearish bets, with outright short positions falling to their lowest in more than 21 months, according to CFTC data through Sept 29.

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