Can Sugar Rally?

During the third quarter of 2025, world sugar futures on the Intercontinental Exchange rose by 4%; however, they have recorded a substantial decline of 16.4% in the first nine months of the year, closing at 16.10 cents per pound on September 30, 2025.

In a Barchart article published on August 5, I wrapped up with the following insights:

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The bearish momentum of sugar continues into early August 2025. Should sugar futures manage to surpass the 17 to 18.50 cents per pound levels, the outlook for this sweet commodity may improve dramatically.

As of now, nearby ICE world sugar futures show trading around 16.28 cents per pound, maintaining relative stability since early August.

The continuous ICE world sugar futures contract ended 2024 at 19.26 cents per pound.

The chart illustrates a significant 19.8% drop to the low of 15.44 cents per pound observed on July 2, 2025. Post that, sugar prices have been consolidating between 16 and 17 cents per pound.

Currently, sugar futures are trading within a consolidation range at their lowest levels since 2021.

The continuous monthly chart reveals an over 45% drop in sugar futures from the peak of 28.14 cents per pound in November 2023 to the low of 15.44 cents per pound in July 2025. Meanwhile, as sugar prices slumped, other soft commodities, including Arabica coffee, cocoa, and frozen concentrated orange juice futures, surged to peak levels. Despite each soft commodity having unique factors affecting its price dynamics, Brazil remains the dominant producer of sugar, coffee, and oranges. Factors such as unfavorable weather conditions, pest challenges, increasing production costs, and U.S. trade restrictions have significantly influenced the prices of several agricultural soft commodities.

The optimistic outlook for sugar in the upcoming months highlights several key factors:

• Increasing production costs could elevate prices.

• The current consolidation in the sugar market might pave the way for a breakout to the upside. Observing price movements in other soft commodities linked to Brazilian production, the outlook for sugar futures appears promising.

• U.S. imposed tariffs serve as trade restrictions that may affect commodity prices, and sugar is no different.

• A potential rise in sugar demand could be anticipated with new regulations affecting U.S. sugar substitutes.