SugarSB1

About Sugar (SB1)

Raw Sugar futures (SB1) track the ICE US No. 11 benchmark for sugar, a globally traded soft commodity. Priced per pound, sugar is produced from sugarcane (80%) and sugar beets (20%). Brazil is the world's largest producer and exporter, and sugar competes with ethanol for sugarcane.

Sugar Price Drivers

Sugar prices are influenced by global supply and demand dynamics, geopolitical events, weather patterns, currency fluctuations, and economic indicators. Futures contracts traded on exchanges like COMEX, NYMEX, and ICE provide price discovery, while physical market conditions and inventory levels drive spot pricing.

Frequently Asked Questions

What determines sugar prices?

Sugar prices are driven by Brazilian production decisions (the world's largest exporter), Indian production and export policy, Thai and Australian harvests, ethanol parity (Brazilian mills can switch between sugar and ethanol), global weather patterns affecting sugarcane, and government subsidies and tariffs.

How does ethanol affect sugar prices?

In Brazil, sugarcane mills can choose to produce either sugar or ethanol. When ethanol prices are high relative to sugar (driven by oil prices), mills divert more cane to ethanol, reducing sugar supply and supporting prices. This sugar-ethanol parity creates a price floor for sugar.

What is the difference between No. 11 and No. 16 sugar?

No. 11 (SB1) is the global raw sugar benchmark traded on ICE, reflecting world market prices. No. 16 tracks US domestic sugar prices, which are typically much higher due to US import quotas and subsidies. The US sugar program keeps domestic prices roughly double the world price.