US sugar futures rose above 14.3 cents per pound, the highest level since February 9, driven by surging oil prices and expectations of tighter global supply. The ongoing crisis in the Middle East has pushed oil prices higher, improving ethanol margins and fueling concerns that mills—particularly in top producer Brazil—will divert a larger share of sugarcane to ethanol, reducing sugar output.
Adding to the bullish outlook, a Reuters poll on March 6 projected that sugar prices will finish the year roughly 10% above current levels. Analysts foresee a shift in the global market balance from a surplus of 1.39 million tons in 2025/26 to a deficit of 1.5 million tons in 2026/27. In Brazil’s key Center-South region, production is expected to total 40.38 million tons for the season, broadly in line with the previous year, but with a smaller share of cane allocated to sugar rather than ethanol.
