The oversupply in the world sugar market may end soon. Oversupply had caused the price of raw sugar to fall to a five-year low by mid-April. Since then, it has recovered somewhat from that level. The price is currently trading at just under 15 US cents a pound, back at the level seen at the start of the year.

A few days ago, a large global sugar trading house placed the expected supply surplus for the current crop year at 6.8 million tonnes. It also projected a smaller supply surplus of 1.4 million tonnes for 2026/27. However, the surplus expected for next year could disappear altogether if El Niño leads to production shortfalls or if Brazil diverts more sugarcane for ethanol.

At the same time, demand for sugar is likely to stagnate. Demand has, in any case, been sluggish for several years now.

Global supply outlook

The International Sugar Organisation (ISO) expects a slight supply deficit of 262,000 tonnes in 2026/27, following an upwardly revised surplus of 2.24 million tonnes in the current crop year. The main reason for this is the expectation that sugar production will fall by 2 million tonnes.

In this context, the ISO........

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