The global sugar market enters the second half of 2026 with an increasingly favorable outlook for prices. According to the SAFRAS IA SCORE - Sugar matrix, market fundamentals remain constructive, with relatively tight global supply and climate risks continuing to be the main factor supporting international prices. Meanwhile, Brazil's domestic market is still facing seasonal pressure from the ongoing harvest, although a gradual recovery is expected toward the end of the year.

During the short term (July-August 2026), the Sugar #11 futures contract in New York posts a score of +50, indicating a moderately bullish trend. While the indicator does not point to an explosive price rally, it suggests a steady recovery driven primarily by growing concerns over global production. In Brazil's domestic market, however, the score remains at -25, signaling a mild bearish trend due to increased sugar availability during the peak crushing season in the Center-South region and greater physical supply in the local market.

From the medium term (September-October) onward, the outlook becomes even more positive. The international market score climbs to +85, reflecting a strong bullish trend, while Brazil's domestic market moves to +25, signaling a reversal in sentiment and the beginning of a recovery in local prices as well. This shift coincides with expectations of easing supply pressure following Brazil's harvest peak and increasing market attention to production risks across the Northern Hemisphere.

Looking further ahead to the long term (November-December), the matrix maintains virtually the same outlook. New York sugar futures continue with a score of +85, reinforcing a strong supportive environment for international prices. Brazil's domestic market remains at +25, suggesting that price recovery will continue, although at a slower pace than in the international market.

A breakdown of the matrix components shows that weather conditions continue to be the most influential factor supporting the bullish outlook. Throughout the entire forecast horizon, climate is rated as "Strong Bullish," reflecting persistent weather uncertainties affecting key sugar-producing countries and the risks these conditions pose to global supply.

The supply factor also contributes positively, maintaining a "Moderately Bullish" rating across all forecast periods. Although Brazil continues to demonstrate strong export capacity, the global supply-demand balance is expected to remain relatively tight, preventing significant downward pressure on international prices.

Meanwhile, global demand is considered neutral throughout the forecast period, indicating stable worldwide consumption without exerting additional upward or downward pressure on prices. The exchange rate is also classified as neutral, suggesting that currency fluctuations are not expected to materially influence the overall market direction.

Another factor gaining importance during the second half of the year is export premiums. The matrix indicates a moderately bullish outlook in the short term, strengthening to strongly bullish in both the medium and long term. This reflects improved competitiveness for Brazilian sugar and firmer international trade negotiations as the commercial season progresses.

Overall, the Safras & Mercado report concludes that the international sugar market will remain significantly stronger than Brazil's domestic market throughout the second half of 2026. While Brazil will initially continue to face pressure from abundant seasonal supply, the global market is expected to increasingly price in climate-related production risks and tighter worldwide availability, supporting a bullish trajectory for sugar prices in New York. Domestic prices are expected to recover more gradually, following seasonal supply normalization and improving international market conditions.

Sugar Outlook According to SAFRAS IA SCORE

Key Factors Behind the Outlook

Maurício Muruci: Market Intelligence Specialist - Sugar & Ethanol Safras & Mercado.

This article is based on an original report published in Portuguese by Safras & Mercado. The English translation, journalistic adaptation, and editorial review were carried out by the AgroLatam editorial team, while preserving the technical content and the original meaning of the report.