Sugar was one of the last to react to the dramatic rise in oil prices due to the military conflict in the Middle East compared to other energy-rich agri-food products. However, it showed a faster price growth.
They have also been supported by supply disruptions caused by the closure of the Strait of Hormuz. As a result, Covrig Analytics estimates that global sugar trade volume has fallen by about 6% and refined sugar production has declined, writes graintrade.
Sugar prices are not only rising because of rising oil prices
Another driver of rising sugar prices is the intention of Brazilian producers to increase the processing of sugarcane into biofuels, reducing the share of food sugar production. According to Unica, the share of cane directed to sugar production was 48.15% in MY 2024/25, rising to 50.78% in MY 2025/26.
At the same time, FAS USDA analysts forecast that in the 2025/26 marketing year, sugar production in Brazil will grow by 2.3% over the previous season to a record 44.7 million tons, in Thailand by 2% (to 10.25 million tons), and in India by 25% (to 35.25 million tons). Despite this, the experts of the U.S. department of experts expect to maintain a surplus of sugar in the world market in 2025/26 MY.
