Sugar futures in the US rose toward 15.2 US cents, the highest since early April, as traders weighed expectations of tighter global supply driven by a shift toward ethanol production. Green Pool raised its 2026/27 global sugar deficit forecast to 4.3 million metric tons from 1.66 million previously, citing elevated oil prices that are encouraging mills in top producer Brazil to divert cane crushing toward ethanol instead of sugar. Unica recently reported that sugar production in the Center-South region dropped 11.9% year-over-year during the first half of April, with mills significantly reducing the amount of cane allocated for sugar from 44.7% last year to just 32.9% in the current period. Ethanol production reached 1.23 billion liters, a 33.32% increase compared to the same period of the previous cycle. Policy support was also reinforced after President Luiz Inácio Lula da Silva confirmed an increase in the mandatory ethanol blend in gasoline to 32% from 30%.

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