Sugar prices rise as global supply tightens

Sugar prices rose sharply in August, posting their biggest monthly gain since 2010 and outperforming the S&P 500 so far this year. The move has been driven by weaker production outlooks in Europe, Brazil and India, along with concerns that El Niño could further disrupt harvests. Analysts cited lower sugar beet yields in the European Union after hot weather, reduced production in Brazil, and India’s decision to allow dutyfree raw sugar imports as signs of tighter supply. Several market estimates also point to a growing global deficit. Another factor is higher oil prices, which can make ethanol more attractive for Brazilian mills that can switch cane between sugar and fuel production. That shift can leave less sugar available for export, adding further pressure to prices.