Week Wrap-up: sugar inches up near the 15-cent mark while Iran-US war standoff continues

● NY July 2026 raw sugar contract recovered further 34 points this Friday to US$ 14.95 c/lb, up 84 points in a week – most of the gains are still attributed to increasing uncertainties in the oil market.

● Brent oil price closed at US$ 108.17/bbl, up 3.0% in a week, marking a week of extreme volatility after Brent’s June contract hit US$ 126/bbl on Thursday, due to the concerns that closure of the Strait of Hormuz will continue for a long time.

● So, despite the strengthening of the Brazilian Real over the U.S. dollar, gasoline price at Petrobras refineries is now 45.6% below import parity, according to DATAGRO PRA.

● A wide gasoline price gap has heightened the outlook of a price revision in Brazil as Petrobras President Magda Chambriard stated that the state-owned company may raise gasoline prices should the government approve legislation reducing taxes.

● However, the market understands that a tax cut may not fully achieve its intended effects, as was recently the case with diesel – a price revision may still be felt at the pump.

● Furthermore, President Lula has just announced, for next week, increases in the blending mandates for both ethanol, to E32, and biodiesel, to B16.

● CS Brazil kicked off the 26/27 crop in full swing, crushing 19.96 mmt of cane in 1H April (+19.5% YoY), and virtually maximizing the ethanol production mix – sugar mix fell 11.78 p.p. YoY to 32.93% in 1H April.

● The downtrend in ethanol prices stalled in São Paulo in the last days — the CIF price of hydrous ethanol in Paulínia/SP closed at R$ 2.4273/liter, excluding taxes, although still 3.3% lower than a week ago, according to DATAGRO PRA.

● This means that VHP sugar for export (US$ 15.43 c/lb FOB Santos) is now more attractive than hydrous ethanol (US$ 14.76 c/lb FOB Santos, basis RP/SP), according to DATAGRO PRA.

● NY May 2026 raw sugar delivery totaled 483 k mt, reflecting the tighter prompt availability in CS Brazil.

● Hedge funds trimmed their net short position in the NY raw sugar market, from 156,138 lots on April 21 to 128,503 lots on April 28.