An emerging El Niño along with supply disruptions linked to tensions in West Asia could affect global sugarcane production and push sugar prices higher in the coming months, according to a market analyst, The Hindu businessline reported.
Michael Ferrari, Vice-President of Research at Moby and Senior Partner at AlphaGeo, said changing weather conditions combined with geopolitical risks could create pressure on agricultural production, particularly crops such as sugarcane.
Ferrari said the expected El Niño conditions could lead to crop stress in major producing regions, which may reduce sugarcane yields and affect sugar production. At the same time, disruptions in global supply chains caused by conflict in West Asia could add further pressure on commodity markets.
He noted that sugar may gain importance as a key commodity in the current global situation. With oil and gasoline prices remaining high, ethanol made from sugarcane could become more attractive as an alternative fuel, increasing demand for sugarcane-based ethanol.
When oil prices rise, ethanol often trades at a premium, which can encourage greater use of sugarcane for fuel production. If sugar supplies remain tight during this period, global prices could move higher.
Several international forecasting agencies have also indicated the possibility of a strong El Niño event during 2026–27. These include the European Centre for Medium-Range Weather Forecasts, the National Oceanic and Atmospheric Administration and the International Research Institute for Climate and Society.
According to forecasts, there is a high probability that conditions in the Pacific Ocean could develop into a strong El Niño. Signs of the previous La Niña phase are fading, while warmer temperatures are beginning to appear below the ocean surface in the Pacific.
Experts said the early impact of El Niño may begin in the second half of 2026 and continue into 2027. During this period, regions such as India and Southeast Asia may experience warmer and drier weather, which could affect sugarcane cultivation.
Such weather conditions could increase stress on crops and influence sugarcane production levels in key growing areas. If this happens alongside tight global supplies, it could support higher sugar prices in the international market.
