Sugar price in New York extended its previous gains; rebounding back above the previously steady support zone of $13.80. Subsequently, the sugar #11 futures are on track to record their first weekly gain after three consecutive weeks of losses. A strong Brazilian Real and increased biofuel demand are supporting the agricultural commodity.
Sugar price rebounds past crucial support zone
Soaring crude oil prices are one of the key bullish drivers of sugar price. Notably, oil prices tend to boost the demand of biofuels as industries look for a cheaper alternative.
Since the start of the US-Iran war in late February, Brent oil price has soared by over 30%. This follows the disruptions along the Strait of Hormuz, which the IEA termed the biggest oil disruption in history. This all-important chokepoint is responsible for the flow of about 20% of the global oil supply.
With the persistent energy shock, sugar mills are increasingly diverting sugar for ethanol production. This has inturn lowered sugar supplies while bolstering prices. Ethanol is often produced from sugarcane and corn.
Similar to sugar price, the benchmark CBOT corn futures extended gains to a three-week high earlier on Friday. With the ongoing geopolitical tensions being a key bullish driver, corn prices are rising on the back of increased ethanol demand.
At the same time, the appreciation of the Brazilian Real is offering support to sugar prices. It has been one of the top performing currencies in 2026. On Thursday, it rose to a two-year high. The surge is discouraging exportation by the country’s sugar producers, thus impacting global supply.
Even with these bullish drivers, a forecast of higher sugar production in Brazil is curbing its gains. Besides, earlier in April, India indicated that it does not intend to ban sugar exports in the current year.
Sugar price technical analysis
Sugar price edged higher on Friday to trade at its highest level in over a week. Earlier in the day, sugar #11 futures in New York rose to $13.80 per pound before pulling back slightly to $13.72 at the time of writing.
A week ago, the agricultural commodity had its price plunge to its lowest level since 2020. Notably, the prices moved in tandem with Brent oil price, which had declined to a 5-week low.
Optimism that the US-Iran war had an end in sight eased the energy shock while lowering the demand for alternative biofuels. The dwindling of those hopes, and continued disruptions along the Strait of Hormuz, has bolstered the demand for cheaper biofuels.
A look at its daily chart signals curbed gains as the bearish death-cross pattern formed close to two weeks ago remains in place. Its current level matches with a crucial support zone that had been steady for several years prior to the US-Iran war. As such, the bulls are striving to gather enough momentum to rise past it and strengthen it.
As such, a move above $13.80 may offer an opportunity for sugar price to rally to the 25-day EMA at $14.10. On the flip side, a pullback may have the bulls striving to defend the support at 413.50. Below that level, it may retest the 6-year low hit earlier in the month at $13.23.
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