Global sugar prices surge as EU expects poor beet harvest
World sugar prices jumped more than 20% in August, and adverse weather across Europe, Asia and South America threatens to push supplies even tighter. The European Commission forecasts EU sugar production could fall by nearly a fifth next season.
World sugar prices recorded their sharpest monthly rise since October 2010 in August, climbing more than 20% — a bigger jump than the gain seen among the largest US-listed companies over the same period. The UN Food and Agriculture Organization says several factors are combining to drive the increase.
Weather and El Niño
The biggest concern is the approaching El Niño weather pattern, expected to be unusually strong this year. It could bring drought to the main sugarcane-growing nations — Brazil, India and Thailand — which together produce roughly 70% of the world's sugar. Drought during the growing season could sharply cut yields, while heavy rain during harvest can disrupt work and lower sugar content in the cane. Some farmers may choose not to plant sugarcane next season at all, given how much water the crop requires.
Brazil and India shift priorities
Brazilian producers are currently favoring ethanol production over sugar, as high global oil prices and government subsidies make ethanol more profitable — further tightening sugar supply. Meanwhile India recently approved duty-free imports of one million tonnes of raw sugar, citing domestic shortages, though some experts question whether the shortage is real, suggesting it may instead reflect speculative stockpiling by traders.
Europe also facing a weak harvest
The European Commission's latest projections show EU sugar production could drop by about 19% in the 2026/2027 season, to 13.4 million tonnes, mainly due to poor weather. France, the bloc's leading sugar producer, has been hit hardest, with this year's harvest expected to be up to 20% below the five-year average. Significant declines are also expected in the Benelux countries, Czechia, Austria and Slovakia. British farmers caution against drawing conclusions too early, as the beet harvest season is still ahead. The Food and Agriculture Organization notes that the situation again highlights how dependent countries are on global supply chains, and how weather and geopolitics can affect food prices far from where the goods are actually produced.
