Highlights

  • March raw sugar traded near 18.12 cents a pound on Wednesday, a day after a five-week low of 17.92.
  • India produced 1.29 million tonnes of sugar from 1 October to 5 November, nearly four times last year's level.
  • Brazilian mills sent 53.44% of cane to ethanol, against 47.23% a season earlier, while sugar output fell 10.29%.
  • Rogers Sugar's third-quarter sugar Revenue fell to C$229.5 million, while adjusted gross Margin rose slightly to C$245 per tonne.

India's mills have produced nearly four times as much sugar as a year ago, and raw sugar has noticed. The ICE March 2027 contract was quoted at about 18.12 US cents a pound on 11 November, up 0.03 cents, a day after a five-week low of 17.92 cents. India's industry body put output from 1 October to 5 November at 1.29 million tonnes. Add weaker Crude Oil and a softer Brazilian real, and prices sit well below the 20 cents-plus of late October. Associated British Foods (LSE:ABF) and Rogers Sugar (TSX:RSI) feel it in different ways.

Brazil: Rain and a Tilt to Ethanol

Brazil's centre-south is the market's swing supplier, and its 2026/27 season has been unusual. Cumulative figures to 1 October showed cane crushing up 1.81% at 412.4 million tonnes, yet sugar output down 10.29% at 24.1 million tonnes. Mills sent 53.44% of cane to ethanol, against 47.23% a season earlier.

Heavy rain then slowed the harvest. In the first half of October, crushing fell 21.3% year on year to 27.3 million tonnes and sugar output fell 27.1% to 1.87 million tonnes. The rains are linked to El Niño, and persistent wet weather could end centre-south milling earlier than usual. A shorter season would cut near-term Brazilian supply, though it would not necessarily say anything about the 2027/28 crop.

India: Rebound Versus Export Uncertainty

In late September, the head of the Indian Sugar Mills Association said India might not be able to export in 2027 because of poor rain in Maharashtra and Karnataka, and might even need imports.

The early crush data point the other way, at least for now, but a strong start does not confirm a large final crop. Export policy for 2026/27 has not been confirmed. If New Delhi allows exports, that could add to world supply; if drought losses emerge in the main cane states, the balance could tighten again.

Ethanol Parity, Crude and the Real

Brazilian mills choose between sugar and ethanol according to relative returns, and lower energy prices reduce the incentive to crush cane for ethanol, which weighs on sugar. If crude stays weak, more cane could go to sugar in later seasons.

Currency matters too. Brazil's election result sharply weakened the real, increasing hedge selling by mills while funds cut long positions. A weaker real raises the local-currency value of dollar-priced sugar and can encourage forward sales.

Refiners and Integrated Producers

Associated British Foods owns sugar businesses in the UK, Europe and Africa. On 3 November it reported a 10% fall in pre-tax profit to £1.3 billion for the year to 12 September, with sugar revenue down 9% at constant currency. It guided to a bigger sugar loss in fiscal 2027, citing El Niño risks to African production and gas costs. Its sugar Earnings depend on regional prices and costs rather than No. 11 alone.

Rogers Sugar refines imported raw cane sugar in Montréal and Vancouver and processes beet in Taber, Alberta. Third-quarter sugar revenue fell to C$229.5 million, mainly on lower Raw No. 11 prices and lower volume, while adjusted gross margin rose slightly to C$245 per tonne. Because raw sugar is largely passed through to customers, lower No. 11 prices tend to cut a refiner's revenue more than its margin. It uses sugar futures and records mark-to-market gains and losses, which can make reported results volatile.

What Could Change the Picture

Support could come from an early end to the centre-south harvest, further El Niño damage in Brazil or Asia, Indian export restrictions staying in place, or a crude oil recovery that improves ethanol returns. Pressure could come from a large Indian crop with room for exports, further real weakness and mill selling, or more cane going to sugar. These are possible outcomes, not forecasts.

Watch UNICA's fortnightly reports, Indian production updates and any export-quota decision, Friday's CFTC data, crude prices and USD/BRL. Rogers holds its fiscal fourth-quarter conference call on 26 November.