Sugar: price volatility reflects uncertainty

According to an analysis by Hedgepoint Global Markets, sugar prices continue to be pressured by factors such as ethanol parity and import arbitrage from China. Despite slower demand from the Chinese market, countries such as Bangladesh, Malaysia and Algeria have increased their purchases since October 2024, which may have supported prices amid global macroeconomic fragility and rumors of a smaller harvest in the Center-South of Brazil. Since the May expiration, the raw sugar contract for July has struggled to recover, with prices reaching 16.97 cents per pound — the lowest level in four years. The resistance is associated with the higher volume of Brazilian deliveries in March and May, in addition to the more cautious behavior of China, the main importer. For the 2025/26 harvest, Hedgepoint maintains an optimistic projection, highlighting favorable rains in April that benefited the later sugarcane and helped to recover the vegetation health index. However, the initial ...