Sugar prices rise due to smaller harvest and widening global deficit.

The sugar market gained strength between August and September amid reduced production expectations in Brazil's Center-South region, interventions in India, and increased geopolitical tensions. This scenario led to price increases in futures contracts across various maturities. Contract number 11, expiring in October, averaged 17.7 cents per pound in the 30 days ending September 11, according to data released by Itaú BBA's Agro Consulting firm.

Oil above US$$ 100 per barrel also contributed to the movement. Tensions in the Middle East, the war between Russia and Ukraine, and inflationary concerns increased demand for various commodities. In India, measures adopted by the government to control domestic prices also moved the market. Among them is the authorization to import up to 1 million tons of raw sugar without tariffs.

In Brazil, the estimate for production in the Center-South region in 2026/27 was revised to 38.9 million tons, a reduction of 400,000 tons compared to the previous forecast. Projected milling decreased from 644.8 million to 639.7 million tons of sugarcane, while the ATR (Total Recoverable Sugar) estimate fell from 138.3 to 136.4 kilograms per ton.

The increase in the sugar mix, now estimated at 46.8%, was not enough to compensate for the lower milling rate and poorer raw material quality.

With revisions in Brazil and other origins, the estimate for the global deficit in 2026/27 has increased to 2.1 million tons. Despite supply support, the consultancy highlights that further, more consistent increases still depend on a recovery in physical demand.