Sugar No.11 Futures

Chalach Chinthammit, Chief Executive Officer and Managing Director of Khon Kaen Sugar Industry Public Company Limited, or KSL, said that world sugar prices, which have risen to around 18.94 cents per pound, a roughly 17-month high, will be a positive factor for next year's crushing season, since all sugar to be sold this year has already been forward-contracted. For the 2026/2027 crushing season, which runs from December 2026 through no later than April 2027, KSL expects sugarcane crush volumes to grow from the previous season's estimate of about 8.3 million tonnes, driven by larger sugarcane output reaching the market and water availability for cultivation that remains consistently favorable. The recent weakening of the baht, averaging around 33.64 baht per US dollar, is an additional positive factor, since about 70% of KSL's revenue comes from exporting sugar products overseas. For the 2026 fiscal year, the company expects full-year results to swing to a profit, compared with a loss of 660 million baht in 2025, because this year there is no provision for expenses related to projects in neighboring countries, and the first nine months of this year already showed a profit of about 358 million baht.

Global sugar prices remain elevated, most recently around 18.74 cents per pound based on futures contract figures at the end of September 2026, prompting analysts at CGS International Securities (Thailand) to take a positive view of sugar stocks. They said the recovery in sugar prices is clearly gaining momentum because of an El Niño phenomenon that has been more severe and prolonged than expected, hurting sugarcane cultivation and reducing sugar output in many countries. Brazil, the world's major sugar producer, is beginning to show signs of lower production, running counter to fairly strong demand growth in India and elsewhere. In addition, the baht's continued weakening, most recently moving in a range of 33.45 to 33.70 baht per dollar on 30 September 2026, is another supporting factor, since most revenue for sugar operators comes from exporting sugar abroad. The research team therefore sees an opportunity to invest in this group of stocks, mainly Buriram Sugar Public Company Limited, or BRR, Khon Kaen Sugar Industry Public Company Limited, or KSL, Khonburi Sugar Public Company Limited, or KBS, and Kaset Thai International Sugar Corporation Public Company Limited, or KTIS. Issara Thawiltermsap, managing director of Khonburi Sugar Public Company Limited, or KBS, said the upward trend in global sugar prices should be a positive factor for KBS's operations, because sugar and related businesses account for as much as about 80% of its revenue. But the benefit will become clear only from next year's sugarcane crushing period onward, since most of this year's sugar has already been sold and priced forward under contracts. The weaker baht also helps drive up revenue from sugar exports, because exports currently account for nearly 80% of revenue in the sugar group.

The raw sugar market has turned bullish amid a shift in the supply-demand outlook. ICE New York October futures, which traded broadly between 14 and 16 cents from April through July, rose from 14.66 cents at the end of July to 17.81 cents at the end of August, and closed at 18.73 cents on September 10. The main driver of the rally was the Sao Paulo Sugar Industry Association's announcement on August 6 that June production in Brazil's main south-central producing region came to 3.9 million tons, down 26.3 percent from a year earlier. At the same time, the advancing El Nino phenomenon raised the prospect of insufficient rainfall in India, prompting speculative funds to buy back short positions. On August 20, India's Directorate General of Foreign Trade announced a duty-free allowance for imports of up to 1 million tons of raw sugar through October 31, and the view that India would become an importer was seen as a turning point for the global supply-demand balance. The European Commission also forecast in August that raw sugar production for the 2026-27 season would total 13.4 million tons, down 19 percent from the previous year. Speculative positioning flipped from a net short of 112,413 lots on July 28 to a net long of 243,463 lots as of September 1, with roughly 350,000 lots bought over a little more than a month.

Asia Plus Securities reported that global sugar prices rose as of September 15, 2026 to 18.16 dollars per pound, up about 21% from the start of the year and 13% from a year earlier. The gain was driven by lower European output due to heatwave problems, concerns over a severe El Nino that would hit Asian production, rising demand in India after the government announced an exemption on sugar import taxes, and higher oil prices that pushed Brazil to produce ethanol instead of sugar. The research team estimates that higher sugar prices will have a negative effect on beverage stocks from higher production costs, but the impact will be fairly limited because most companies lock in annual sugar raw material prices and have already adjusted their production formulas to use sweeteners instead of sugar to a large extent. The share of sugar costs in total production costs for most companies is around 8% to 10%, while COCOCO has the lowest sugar cost share at less than 2%. The stock expected to be hit hardest is SAPPE, given its export share of more than 70%, while the stock expected to be least affected is COCOCO, though the research team is still watching the impact of El Nino on key raw materials such as mature coconuts and aromatic coconuts. The research team maintained an equal-weight investment stance on the beverage sector, expecting group-wide earnings to be unexciting in the third quarter of 2026 due to the low season, but to accelerate again in the fourth quarter of 2026, and picked CBG and ICHI as top stocks on expectations that both companies will post earnings growth on both a quarter-on-quarter and year-on-year basis and hit their yearly highs in the fourth quarter of 2026.

India's sugar output is likely to fall to around 29-31 million tonnes next season, as dry weather driven by El Niño threatens the harvest due to begin next month, compared with an estimated 31 million tonnes in the current season according to the Indian Sugar and Bio-energy Manufacturers Association. A Bloomberg survey of 11 traders, analysts and sugar mill operators indicates India may need to import 2-3 million tonnes of sugar next year, after current import quotas are used up. Klaudiu Kofrik, principal analyst at Covrig Analytics, expects India may begin additional imports as early as July next year. The International Sugar Organization warned in May that the global sugar market could face a deficit of about 260,000 tonnes. India's monsoon rainfall, crucial for sugarcane cultivation, has been about 15% below normal. Those expectations have pushed raw sugar futures in New York up about 30% since the start of the year, and India last month allowed sugar mills and refineries to import raw sugar duty-free, while setting stock-holding limits for traders and large users. Ashwini Srivastava, joint secretary for sugar at India's Food Ministry, said authorities will monitor sugar prices closely and have begun tracking production data on a monthly basis.

Sugar prices surged 21.5% in August, marking their strongest monthly gain since October 2010, and are now up about 20% year-to-date, outperforming the S&P 500's nearly 13% advance. The rally is driven by expectations of lower sugar beet yields in the European Union due to adverse weather, concerns over El Niño's impact on production in Asia, lower output in Brazil, and India's announcement of duty-free raw sugar imports. The European Commission estimates a 19% decline in EU production to 13.4 million metric tons for the 2026/27 marketing year, while Citi projects a world deficit of 1.3 million metric tons and Green Pool Commodity Specialists estimate 3.2 million metric tons. Citi analysts call sugar a "highest-conviction bullish" market and raised their price target to 19 cents per pound over three months. El Niño poses a significant forward-looking risk, with Brazil, India, and Thailand accounting for about 70% of global sugar exports, and higher energy prices are making ethanol more attractive in Brazil, reducing sugar availability. India's first import authorization since the 2017-2018 season reinforces views of tighter supplies.

Khorat Sugar Company Public Company Limited (KBS) expects that the volume of sugarcane crushed in the 2026/2027 production season will be around 4.2 million tonnes, the same as this year, as weather conditions have not changed significantly. Meanwhile, global sugar prices have recovered to above 17 cents per pound, from a previous low of around 13 cents per pound in April 2026, which will positively affect selling prices next year. Managing Director Issara Thawinlertsap said the company still needs to monitor El Niño weather conditions, but this year has not been severely affected. Additionally, the U.S. import tariff measure of 12.5% has no impact on the company, as it barely exports to that market. Furthermore, KBS has cancelled its plan to issue debentures worth up to 1 billion baht, which had been approved by shareholders, due to improved sugar prices and sufficient cash flow. Currently, about 80% of revenue comes from sugar and molasses, and over 10% from the power plant business.

Adecoagro S.A. has completed the acquisition of the Caarapó Mill from Raízen Group, paying R$705 million (approximately US$136 million) in cash at closing. The mill, which crushed 3.5 million tons of sugarcane in the 2025/26 harvest, is now under Adecoagro's ownership and management. The company plans to boost Caarapó's crushing volume to 4.5 million tons in 2027 by redirecting excess cane from its existing operations, and expects the asset's profitability to align with its other Sugar, Ethanol & Energy operations. With this acquisition, Adecoagro's Mato Grosso do Sul Cluster is projected to crush 17 million tons in 2027, making it one of the largest clusters in Brazil. The purchase price implies approximately US$39 per ton of crushing capacity, and Adecoagro sees significant opportunities to improve operational efficiency and reduce costs.

World sugar prices have recovered to over 17 cents per pound, up from a low of around 13 cents per pound in April 2026, due to tight supply from El Niño drought and India's plan to consider reducing or abolishing its 100% sugar import tax to increase domestic supply. Analysts at Innovest X Securities are positive on sugar stocks, especially KSL, KBS, and KTIS, which will benefit from higher selling prices. Meanwhile, BRR expects cane crushing volume for 2026/27 to increase to 2.5-2.6 million tons from 2.2 million tons last year, and expects the second half of the year to continue growing from the first half, supported by expanding demand and a weaker baht.

KTIS Group reported nine-month results for 2026 with total revenue of 12.55 billion baht, with the ethanol business growing the most as revenue rose 227%. Chief Executive Officer Praphan Siriviriyakul said the company expects support from global raw sugar prices rising to their highest level of the year, which will boost revenue and profitability for the rest of this year and continue into 2027.

Shenwan Hongyuan Research noted that the probability of a super El Niño event has recently risen to 95%, and extreme weather could significantly disrupt global agricultural supply. A strong El Niño will cause drought and lower output in major natural rubber and palm oil producing areas in Southeast Asia, while sugarcane production in India and Thailand will come under pressure, supporting expectations of higher sugar prices. Core blueberry producing regions in Peru and Chile also face output reduction risks, pushing prices higher in the fourth quarter. Historical experience shows that such climate events often reshape the supply and demand landscape for some tropical cash crops through weather premiums, thereby lifting inflation expectations. As of 10:41 a.m. on August 20, 2026, the China National Grain Industry Index tracked by the ChinaAMC Grain ETF was down 2.47%, but the ETF had seen four consecutive days of net capital inflows.

Intercontinental Exchange announced that its global sugar markets hit record open interest of over 2.3 million contracts on August 14, 2026, up 43% year-over-year and surpassing the previous record set in February 2010. The record was driven by ICE Sugar No. 11, the global benchmark for raw cane sugar, with record open interest of 2.2 million contracts, and ICE White Sugar, the benchmark for refined sugar, with record open interest of 188,000 contracts. Matthew Ryan, Senior Director of Soft Commodities at ICE, attributed the surge to shifting supply and demand balances, a strong El Niño forecast through January 2027, and uncertainty around major producing regions. Open interest across ICE's broader agricultural complex is up 46% year-over-year, with cocoa up 65%, cotton up 76%, canola up 68%, and coffee up 8%, while average daily volume across the complex is up 28% year-to-date.

Sugar stocks moved higher across the board this morning, with KTIS up 5.35 percent to 1.97 baht, KSL up 4.21 percent to 1.98 baht, and KBS up 2.40 percent to 6.40 baht, after India prepared to cut its 100 percent sugar import duty to curb record-high domestic prices. Meanwhile, global sugar supply is tight and faces drought risk from El Nino, supporting a higher outlook for world sugar prices. Innovest X Securities is positive on the shares of all three sugar producers.

Buriram Sugar Public Company Limited, or BRR, said global sugar prices are beginning to show signs of recovery, which will support its business direction in the second half of the year. In the second quarter of 2026, the company posted revenue from sales and services of 1.745 billion baht, up 11.54 percent from the same period last year. However, the average selling price of sugar per tonne fell 21.60 percent and the average selling price of molasses fell 26.44 percent, resulting in a net loss of 2.83 million baht for the second quarter of 2026. For the first six months, BRR still recorded a net profit of 238.62 million baht. Chief Executive Officer Anan Tangtrongvechakit said operating results from the power plant business and a higher proportion of refinery products helped support performance. The company will continue to manage costs, expand non-sugar businesses including power plants, alternative energy, fertiliser, and packaging from bagasse, while upgrading the sugar business through its refinery to add value and reduce reliance on sugar revenue alone.

Sugar prices rallied on continued weather-related supply concerns, with October NY world sugar #11 up 2.38% and October London ICE white sugar #5 up 1.99%. Drought and hot weather in Europe are expected to cut EU and UK sugar production to 14.98 MMT this year, the lowest in 11 years, according to S&P Global Energy. India's cumulative monsoon rainfall was 12% below normal as of August 13, and Brazil's Center-South June sugar production fell 26.3% year-over-year to 3.903 MMT. Analysts including Covrig Analytics, Green Pool Commodity Specialists, StoneX, and Czarnikow have shifted to projecting global sugar deficits for 2026/27, citing El Niño risks and lower output in major producers.

Sugar prices fell back on long liquidation pressure after the sharp August rally, with October NY world sugar #11 down 0.35 and October London ICE white sugar #5 down 4.10. Before falling back, both contracts posted new 1.25-year nearest-futures highs. The recent rally was sparked by concern about a weather-related decline in global sugar production, with drought and hot weather in Europe set to cut EU and UK sugar production to 14.98 MMT this year, the lowest level in 11 years, according to S&P Global Energy. Lower sugar output in Brazil is also bullish after Unica reported Brazil Center-South June sugar production fell 26.3% year-over-year to 3.903 MMT. Since posting a 5.25-month low on July 30, sugar prices have surged on the outlook for tighter future supplies, with Covrig Analytics now expecting a global sugar deficit in 2026/27 of -300,000 MT compared to a June forecast for a +100,00 MT surplus, Green Pool Commodity Specialists raising their global 2026/27 sugar deficit to -3.3 MMT from a June estimate of -1.76 MMT, and StoneX raising its 2026/27 global sugar deficit forecast to -1.7 MMT from a May estimate of -550,000 MT.

Khon Kaen Sugar, or KSL, expects its cane crush for the 2026/27 production season to rise to 8.5 to 9 million tonnes, up from 8.3 to 8.4 million tonnes in the current season, supported by improved mill efficiency, particularly at the Sa Kaeo plant which has a capacity of around 1 million tonnes. CEO Chalush Chinthammit said the company is beginning to see positive signals from global sugar prices, which have risen to 16 cents per pound with a chance of moving to 17 cents per pound, prompting it to defer some sales to next year. The benefits are expected to clearly boost profits from the fourth quarter of 2026 onwards. Meanwhile, KSL is in talks with new partners in industries that use sugar as a key raw material, such as ice cream and sweetened condensed milk, to extend its business and generate growth from existing resources and by-products.

Global food prices rose in July to their highest level in more than three years, amid concerns over production volumes and key grain export routes. The Food and Agriculture Organization of the United Nations reported that its world food price index increased 0.6 percent from the previous month, reaching the highest since January 2023, driven mainly by higher prices for cereals, sugar, and vegetable oils. A major risk stems from the Black Sea region after attacks between Russia and Ukraine intensified, raising concerns over grain exports and helping push wheat prices to a two-year high in June. Meanwhile, Europe is facing one of its most severe drops in grain production on record due to extreme heat, and key growing areas in the United States are experiencing drought, increasing risks to corn and soybean output. Food price risks could rise further in the near term due to the prospect of an unusually strong El Niño, coupled with fertilizer supply issues and still-high energy costs.

Sugar prices settled higher on Wednesday, with London sugar posting a 4-week high, as the outlook for tighter future supplies lifted the market. Covrig Analytics now expects a global sugar deficit in 2026/27 of -300,000 metric tons, compared to a June forecast for a +100,000 metric ton surplus. Green Pool Commodity Specialists raised their global 2026/27 sugar deficit estimate to -3.3 million metric tons from a June estimate of -1.76 million metric tons, and StoneX raised its 2026/27 global sugar deficit forecast to -1.7 million metric tons from a May estimate of -550,000 metric tons. Concerns over India’s sugar crop and the potential for an El Niño weather pattern to disrupt production in Brazil, India, and Thailand are also supporting prices.

Sugar prices extended their rally, with NY sugar hitting a three-and-a-half-week high and London sugar a four-week high, as analysts raised deficit forecasts for the 2026/27 season. Covrig Analytics now sees a global sugar deficit of 300,000 metric tons, reversing its earlier surplus call, while Green Pool Commodity Specialists widened its deficit estimate to 3.3 million metric tons and StoneX raised its deficit forecast to 1.7 million metric tons. Concerns over India's monsoon rainfall and the potential impact of a strong El Niño on top producers Brazil, India, and Thailand are also supporting prices. Brazil's sugar output has been curbed as mills shift more cane to ethanol, with Unica reporting a 2% year-on-year drop in Center-South production through May. The International Sugar Organization projects a global deficit of 262,000 metric tons for 2026/27, citing El Niño risks, while the USDA forecasts a 6.5% decline in world sugar production to 184.854 million metric tons.

Sugar prices settled sharply higher on Friday, with October NY world sugar #11 closing up 2.70% and October London ICE white sugar #5 up 3.37%, as soaring crude oil prices triggered short covering. WTI crude oil surged more than 4% to a one-month high, boosting ethanol prices and potentially prompting global sugar mills to divert more cane toward ethanol production, curbing sugar supplies. The rally reversed Thursday's three-week lows driven by improving Indian monsoon rains, though cumulative rainfall remained 24% below normal as of July 17. Funds held a record net-long position in London sugar of 58,847 contracts as of July 14, which could amplify any downturn. Broader bullish factors include El Niño threats to production in Brazil, India, and Thailand, with Brazil's Center-South sugar output down 2% year-on-year through May as mills prioritized ethanol, and Czarnikow flipping its 2026/27 global balance to a deficit of 100,000 metric tons.

Sugar prices settled higher on Tuesday after Brazil approved a higher ethanol blend in its gasoline, which could potentially boost ethanol demand and prompt Brazil's sugar mills to boost ethanol output at the expense of sugar. October NY world sugar #11 closed up 0.13, or 0.88%, and August London ICE white sugar #5 closed up 0.30, or 0.06%. Brazil's National Energy Policy Council approved a resolution that raises the mandatory blend of anhydrous ethanol in gasoline to 32% from the current 30%. Prices had tumbled to two-week lows on Monday amid an improvement in India's monsoon rains, with cumulative rainfall 19% below normal as of July 13, a substantial improvement from 42% below normal on June 30. Support also came from strength in crude oil prices, with WTI crude oil rising more than 1% to a one-month high, which benefits ethanol prices and could persuade global sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies.

Sugar prices surged today as weak monsoon rains in India threatened the sugarcane harvest in the world's second-largest producer. NY sugar hit a two-week high and London sugar reached a 2.75-month high after India's Meteorological Department reported cumulative monsoon rainfall 42% below normal as of June 26, with the Earth Science Ministry warning this could be the weakest monsoon in 11 years. Adding support, Brazil's 2026/27 Center-South sugar production through May fell 2% year-on-year to 6.838 million metric tons as mills shifted more cane to ethanol, and trader Czarnikow revised its global 2026/27 sugar balance to a deficit of 100,000 metric tons from a prior surplus estimate. The rally was also underpinned by El Niño concerns, with Japan's Meteorological Agency confirming the weather pattern's formation, which is likely to reduce rainfall in Brazil, India, and Thailand, the top three sugar-producing regions.