El Niño fears keep raw sugar firm; prices average 18.37 cents in September: ISO
The ISO reported that raw sugar prices averaged 18.37 cents/lb in September, up from August, while speculative funds’ net long position increased to 152,117 lots. Weather risks in Brazil and India strengthened bullish sentiment, and the projected 2026-27 global sugar deficit is expected to widen beyond 0.2 million tonnes.
World raw sugar prices consolidated in September after a strong rally in August, with the International Sugar Agreement (ISA) daily raw sugar price averaging 18.37 US cents per pound, up from 17.36 cents in August, the International Sugar Organization (ISO) said in its September market report.
According to the report, the nearby October futures contract traded between 17.5 and 18.5 cents per pound for most of the month. Prices climbed sharply again in early October, with the March contract moving above 20 cents.
The ISO said the 20 per cent rally in August was driven mainly by speculative funds, which switched from a net short to a net long position amid growing concern over El Niño-related risks to production. Speculative buying slowed in September, but the funds’ net long position still rose to 152,117 lots on September 29 from 132,496 lots at the start of the month. The report said the early October rally pointed to further fund buying.
The ISO said recent fundamental news had been largely bullish. Rain had slowed the harvest in Centre-South Brazil, policy measures there had supported ethanol prices, and a poor monsoon in Maharashtra and Karnataka had raised the chance that India would need more imports next year.
However, the report said the market looked adequately supplied in the short term. The October raw sugar contract expired at a 98-point discount to March, with 1.45 million tonnes delivered. This was below the six-year average of 1.6 million tonnes, and some analysts read the expiry as a sign of weak demand.
White sugar prices eased during the month. The ISO White Sugar Price Index averaged $521 per tonne, while the nominal white sugar premium fell by about $14 to an average of $116 per tonne. The ISO linked the weaker premium partly to the October No. 5 expiry, where 499,350 tonnes were delivered, one of the largest deliveries on record. It also pointed to exports permitted by Egypt and Pakistan, and to limited Brazilian shipments heading to refineries in the United Arab Emirates (UAE) and Iran.
In its August Quarterly Market Outlook, the ISO had forecast a small global deficit of 0.2 million tonnes for 2026-27. It said the deficit was now likely to be larger, because weather had prevented Brazil from raising sugar output to offset lower production in the European Union (EU), Thailand and Central America. With six months to go before the next No. 11 contract expiry, the ISO said speculative funds were likely to remain an important driver of prices in the coming weeks.
According to the report, the Food and Agriculture Organization (FAO) sugar price index rose 6.1 per cent in September to 114 points, its highest level since April 2025.
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Source : ChiniMandi
