Mixed Trend in Sugar Prices Due to Weather Risks in Producing Nations

20-Aug-2026 01:31 PM

New York. Concerns are mounting regarding adverse weather conditions driven by the El Niño phenomenon in the world's top two producing nations—Brazil and India. Thailand, the second-largest sugar exporter, is also likely to be affected. El Niño is expected to have some impact on Australia and the European Union as well. Anticipated declines in sugarcane and sugar production across Brazil, India, and Thailand could significantly alter the dynamics of the global market.

The threat of El Niño is growing for Northern Hemisphere countries; however, in India, monsoon conditions remained largely normal from July through mid-August, and rainfall continues or is expected in some states, meaning the sugarcane crop has not suffered significant damage so far. Nevertheless, forecasts of hot and dry weather in September raise concerns that the crop could be impacted. The area under sugarcane cultivation is currently trailing last year's figures by approximately 30,000 hectares.

Amidst the El Niño threat, sugar prices have begun to rise sharply in Brazil, India, and Thailand. In Brazil—the leading producer and exporter—heavy torrential rains are expected in the southern region during the second half of the year; this could slow down the pace of sugarcane harvesting, transportation, and crushing, while potentially compromising cane quality and the average sugar recovery rate. However, this could also foster expectations of a better sugarcane yield for the upcoming season.

India and Thailand face the opposite scenario. El Niño typically results in reduced rainfall across Asia, thereby impacting sugarcane yields. The monsoon has already begun to weaken in India.