Sugar #16 Sep '26 (SDU26)

Description

The white crystalline substance called "sugar" is the organic chemical compound sucrose, one of several related compounds, all known as sugars. These include glucose, dextrose, fructose, and lactose. All sugars are members of the larger group of compounds called carbohydrates and are characterized by a sweet taste. Sucrose is considered a double sugar because it is composed of one molecule of glucose and one molecule of fructose. While sucrose is common in many plants, it occurs in the highest concentration in sugarcane (Saccharum officinarum) and sugar beets (Beta vulgaris). Sugarcane is about 7 to 18 percent sugar by weight, while sugar beets are 8 to 22 percent.

Sugarcane is a member of the grass family and is a perennial. Sugarcane is cultivated in tropical and subtropical regions worldwide, roughly between the Tropics of Cancer and Capricorn. It grows best in hot, wet climates with heavy rainfall followed by a dry season. The largest cane producers are Florida, Louisiana, Texas, and Hawaii. On a commercial basis, sugarcane is not grown from seeds but from cuttings or pieces of stalk.

Sugar beets, which are produced in temperate or colder climates, are annuals grown from seeds. Sugar beets do best with moderate temperatures and evenly distributed rainfall. The beets are planted in the spring and harvested in the fall. The sugar is contained in the root of the beet, but the sugars from beets and cane are identical. Sugar beet production occurs primarily in Europe, the US, China, and Japan. The largest sugar beet-producing states are Minnesota, Idaho, North Dakota, and Michigan. Sugar beets are refined to yield white sugar, and very little raw sugar is produced.

Sugar beets and sugarcane are produced in over 100 countries around the world. Of all the sugar produced, about 25% is processed from sugar beets, and the remaining 75% is from sugar cane. The trend has been that sugar production from cane has increased relative to that from beets. Sugarcane is a perennial plant, while the sugar beet is an annual plant. Due to its longer production cycle, sugarcane production and the sugar processed from it may not be quite as responsive to price changes.

Sugar futures are traded at the ICE Futures US exchange, the Bolsa de Mercadorias & Futuros (BM&F), the Tokyo Grain Exchange (TGE), and the ICE Futures Europe exchange.

Raw sugar is traded on the ICE Futures US exchange, while white sugar is traded on the ICE Futures Europe exchange. The most actively traded contract is the No. 11 (World) sugar contract at the ICE exchange. The No. 11 contract calls for the delivery of 112,000 pounds (50 long tons) of raw cane centrifugal sugar from any of 28 foreign countries of origin and the United States. The ICE exchange also trades the No. 14 sugar contract (Domestic), which calls for the delivery of raw centrifugal cane sugar in the United States. Futures on white sugar are traded on the London International Financial Futures Exchange and call for the delivery of 50 metric tons of white beet sugar, cane crystal sugar, or refined sugar of any origin from the crop current at the time of delivery.

Prices - ICE World No. 11 sugar futures prices (Barchart.com symbol SB) pushed higher in early 2025 and posted their 2025 high in February at 21.57 cents per pound. Tighter global sugar supplies supported prices in early 2025 after the International Sugar Organization (ISO) in February raised its 2024/25 global sugar deficit forecast to -4.88 MMT from a November forecast of -2.51 MMT, showing a tightening market from the 2023/24 global sugar surplus of 1.31 MMT. Also, drought and excessive heat in late 2024 caused fires in Brazil's top sugar-producing state, São Paulo, damaging sugar crops. Green Pool Commodity Specialists noted that as much as 5 MMT of sugar cane may have been lost due to the fires. However, prices trended lower the remainder of the year as global sugar production picked up and supplies increased. In May, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% yr/yr to a record 189.318 million metric tons (MMT). In June, Czarnikow projected a 7.5 MMT global sugar surplus for the 2025/26 season, the largest surplus in 8 years. In November, ISO forecast a 1.625 million MT sugar surplus in 2025-26, following a 2.916 million MT deficit in 2024-25. Sugar prices remained under pressure into Q4 when they dropped to a 5-year low in November at 14.04 cents per pound. The strongest monsoon in five years in 2025 in India, the world's second-largest sugar producer, prompted the India Sugar Mill Association (ISMA) to raise its 2025/26 India sugar production estimate to 31 MMT, up +18.8% yr/yr. Sugar prices recovered slightly into year-end after the Brazilian real rallied to a 1-1/2-year high against the dollar, discouraging export sales by Brazil's sugar producers. Sugar prices finished 2025 down sharply by -22% yr/yr at 15.01 cents per pound.

Supply - World production of centrifugal (raw) sugar in the 2025/26 marketing year (October 1 to September 30) rose by +4.6% yr/yr to 189.259 million metric tons. The world's largest sugar producers in 2025/26 are Brazil (23.5% of world production), India (18.6%), and the European Union (8.2%). US sugar production in 2025/26 fell by -0.6% yr/yr to 8.475 million metric tons. US production of cane sugar in 2024/25 fell by -2.9% yr/yr to 4.019 million short tons, and beet sugar production rose by +4.2% yr/yr to 5.389 million short tons. World ending stocks in 2024/25 fell by -5.7% yr/yr to 42.400 million metric tons, below the 2018/19 record high of 52.192 million metric tons.

Demand - World domestic consumption of centrifugal (raw) sugar in 2025/26 rose by +1.3% at 178.657 million metric tons. US domestic disappearance (consumption) of sugar in 2024/25 fell by -3.0% yr/yr at 12.445 million short tons.

Trade - World exports of centrifugal sugar in 2025/26 rose by +4.1% yr/yr to 66.001 million metric tons. The world's largest sugar exporters in 2025/26 are Brazil (54.1% of total world exports), Thailand (10.6%), and India (6.8%).

US sugar exports in 2024/25 fell by -59.9% yr/yr to 100,000 short tons. US sugar imports in 2025/26 fell by -33.0% yr/yr to 2.077 million metric tons.

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