Raw sugar futures climbed on Thursday as traders focused on tightening supply risks, potential weather disruption and the possibility that high energy prices could encourage cane mills to produce more ethanol instead of sugar. Coffee prices also moved higher, while cocoa weakened as improving production expectations in Ivory Coast weighed on sentiment.
The latest moves show how soft commodity markets remain highly sensitive to weather, energy prices, crop forecasts and shifts in industrial demand. Sugar, coffee and cocoa each followed different drivers, but all three markets continue to reflect a broader environment of uncertainty across global agricultural supply chains.
Raw sugar on ICE settled up 0.17 cent, or 1.2%, at 14.90 cents per pound. White sugar rose 0.9% to $445.00 per metric ton. Arabica coffee gained 5.1 cents, or 1.9%, to settle at $2.734 per pound, while robusta coffee rose 2.1% to $3,399 per ton. Cocoa moved in the opposite direction, with London cocoa down 2.7% at 2,850 pounds per ton and New York cocoa falling 3.1% to $3,767 per ton.
Sugar Gains as Supply Concerns Build
Sugar was the strongest story of the session. Raw sugar recovered after falling 1.9% on Wednesday, supported by concerns that global supply may tighten in the next season.
Dealers pointed to expectations that European Union sugar production could fall by 8% to 10% next season because of reduced plantings. The EU is the world’s third-largest sugar producer, so a decline of that size would be meaningful for global supply balances.
There are also concerns about adverse weather in the United States. While the U.S. is not the largest global sugar producer, weather-driven losses can still influence trade flows, regional pricing and sentiment in futures markets.
The broader concern is that the global sugar market could flip into deficit next season. That would mark a shift from the more comfortable supply conditions seen recently and could make traders more responsive to any fresh crop risk.
El Niño Risk Adds to the Bullish Case
Weather remains one of the biggest variables for sugar. Traders are watching the potential impact of an El Niño weather event, which can affect rainfall patterns, crop yields and harvest quality across major producing regions.
Sugar production is highly dependent on weather consistency. Too much rain can disrupt harvesting and reduce sugar content in cane. Too little rain can damage crop development and reduce yields. When the market begins to price in weather uncertainty, futures can move quickly.
An El Niño-driven supply disruption would matter more if global inventories are already tightening. That is why traders are paying close attention to early signals from Europe, the United States and other producing regions.
The sugar market does not need a confirmed crop failure to rise. Often, prices respond first to the risk that production estimates may need to be revised lower.
Oil Prices Influence Sugar Through Ethanol
Energy prices also played a role. Crude oil prices traded higher for much of Thursday after reports signaled complications in U.S.-Iran peace talks. Stronger oil prices can support sugar because they improve the economics of ethanol production.
In major cane-producing countries, especially Brazil, mills often have flexibility to decide how much cane is used to produce sugar and how much is used to produce ethanol fuel. When oil prices are high, ethanol becomes more attractive. That can lead mills to allocate more cane to fuel production and less to sugar.
This dynamic can reduce sugar availability for export and tighten the global market.
The link between oil and sugar is not always immediate, but it is important. If energy prices remain elevated, sugar traders may continue to price in the risk that cane mills favor ethanol output. That would strengthen the bullish argument for sugar futures.
White Sugar Also Moves Higher
White sugar also rose, gaining 0.9% to $445.00 per metric ton. The move reflects broader support across the sugar complex.
White sugar is more refined than raw sugar and is often used in food manufacturing, retail products and industrial processing. Its price can be influenced by refining margins, regional supply, freight costs and import demand.
When raw sugar rises on production concerns, white sugar often follows. However, the size of the move can differ depending on refinery availability and physical demand.
For now, both raw and white sugar are responding to the same broad theme: the market is becoming more concerned about supply availability next season.
Cocoa Falls as Ivory Coast Outlook Improves
Cocoa moved lower, reversing part of the strength seen earlier this month. London cocoa settled down 79 pounds, or 2.7%, at 2,850 pounds per ton. That leaves the contract well below last week’s three-and-a-half-month high of 3,627 pounds.
New York cocoa also fell, losing 3.1% to settle at $3,767 per ton.
The main pressure came from an improving production outlook in Ivory Coast, the world’s largest cocoa grower. The head of the Coffee and Cocoa Council said the country expects production to reach between 2 million and 2.1 million metric tons in the current 2025/26 season, which runs through the end of September. That would represent a 10.5% increase from last season.
For cocoa traders, that is a significant signal. Ivory Coast dominates global cocoa supply, so stronger output expectations can quickly weigh on prices.
Cocoa Demand Offers Some Support
Although cocoa prices fell, losses were limited by signs of improving demand prospects. After a period in which chocolate makers responded to high cocoa prices by shrinking bars, adding wafers or using alternatives, some producers may begin putting more cocoa back into products.
This matters because high cocoa prices can destroy demand. When manufacturers reduce cocoa content, reformulate products or push cheaper alternatives, the market can lose consumption momentum.
If chocolate makers begin restoring cocoa content, demand could recover. That would provide some support to prices, especially if consumers remain willing to buy despite higher retail costs.
Still, the immediate supply signal from Ivory Coast appears to be dominating the cocoa market. Traders may need stronger evidence of demand recovery before cocoa can regain its recent highs.
Coffee Rises Despite Brazil Crop Pressure
Coffee prices also gained on Thursday. Arabica coffee settled up 1.9% at $2.734 per pound, while robusta coffee rose 2.1% to $3,399 per ton.
The gains came despite continued pressure from expectations of a large Brazilian crop. Brazil’s coffee output from the 2026 harvest is forecast to rise by 18% from last year to a record 66.7 million 60-kilogram bags, according to national crop agency Conab.
A bumper crop in Brazil, the world’s largest coffee producer, is usually bearish for prices. Higher supply can improve export availability and reduce concerns about shortages.
However, the market found short-term support from declining exchange-certified stocks. Certified arabica stocks continued to fall and reached their smallest level since February.
Certified Stocks Limit Coffee Downside
Certified stocks are important because they represent exchange-approved supplies available for delivery. When those stocks decline, traders may become more cautious about pushing prices too low, even when future crop expectations look strong.
The coffee market is therefore balancing two competing forces. On one side, Brazil’s record harvest forecast is a major bearish factor. On the other side, falling certified stocks suggest that immediately deliverable supplies are tighter.
This can create short-term rallies even within a broader defensive market. Traders may cover short positions or buy futures when certified stocks fall, especially if prices have already been under pressure.
For arabica, the key question is whether Brazil’s crop will replenish global supply quickly enough to offset current inventory tightness.
Robusta Coffee Also Strengthens
Robusta coffee rose more than 2%, showing that the coffee rally was not limited to arabica. Robusta is widely used in instant coffee and blends and has become increasingly important as consumers and manufacturers adjust to higher arabica prices.
Robusta often responds to different supply factors than arabica, including production conditions in Vietnam, Indonesia and other major robusta-growing regions. However, broad coffee sentiment can affect both markets.
The rise in robusta suggests that traders remain attentive to near-term supply and demand conditions across the coffee complex, even as Brazil’s arabica crop outlook weighs on longer-term sentiment.
What Traders Should Watch Next
For sugar, the most important factor is whether supply concerns deepen. Traders will watch EU planting data, weather conditions in the United States and any signs that El Niño could disrupt major producing regions.
Energy prices are also critical. If oil remains elevated, cane mills may have greater incentive to produce ethanol rather than sugar. That could reduce sugar output and support futures.
For cocoa, Ivory Coast production estimates will remain the main focus. If output continues to look stronger than last season, cocoa may struggle to recover. However, signs of improving chocolate demand could limit downside.
For coffee, Brazil’s harvest will dominate the long-term outlook. A record crop would normally pressure prices, but certified stock declines could continue to create short-term support.
Across all three markets, traders should also monitor currency movements, freight costs, fund positioning and weather updates.
Market Takeaway
The soft commodities market remains highly divided. Sugar is gaining support from supply concerns, weather risks and energy-linked ethanol demand. Coffee is rising because falling certified stocks are limiting downside, even though Brazil is expected to produce a record crop. Cocoa is weakening as Ivory Coast’s production outlook improves.
This split shows that each commodity is being driven by its own fundamentals. There is no single agricultural market story. Sugar is tightening, coffee is balancing future supply against current stock pressure, and cocoa is adjusting to stronger West African production expectations.
For traders, the lesson is clear: weather, energy prices and physical stock levels remain just as important as headline crop forecasts.
Conclusion
Raw sugar futures rose Thursday as concerns over EU output, adverse weather, El Niño risk and high energy prices supported the market. The possibility that cane mills may shift more production toward ethanol added another bullish layer.
Coffee also advanced, supported by declining exchange-certified stocks, even as expectations for a record Brazilian harvest kept the broader outlook cautious.
Cocoa fell as Ivory Coast’s improved production forecast weighed on prices, although better demand prospects helped limit losses.
The next phase for soft commodities will depend on whether supply risks intensify or ease. Sugar traders will watch energy and weather. Coffee traders will track Brazil’s harvest and certified stocks. Cocoa traders will focus on Ivory Coast output and whether chocolate demand can recover after a period of high prices and product reformulation.
