Sugar prices rise due to gasoline strength

What happened: Sugar prices surged on Tuesday and Wednesday, with May NY world sugar #11 (SBK26) reaching a 3-week high of +0.61 (+4.32%) and +0.28 (+2.02%) respectively, while Aug London ICE white sugar #5 (SWQ26) hit a 4-week high of +11.90 (+2.75%) and +5.90 (+1.38%). This rally was driven by strength in gasoline prices, with gasoline (RBM26) touching a 3.75-year high.

Market impact: The sugar industry is affected, with producers and traders benefiting from higher prices. This strength is attributed to the positive correlation between gasoline and sugar prices, as gasoline is a key feedstock for sugar production. The rally also reflects smaller Brazil sugar output, a major global producer.

What to watch next: Investors should monitor the following catalysts: (1) the May 20, 2026, contract expiration for May NY world sugar #11 (SBK26), which could bring volatility; (2) Brazil's sugar production data, scheduled for release in the coming weeks, which may impact supply dynamics; and (3) gasoline price movements, as continued strength could further boost sugar prices.