Raw sugar futures approached one-year highs as India opens duty-free importation, boosting market confidence amidst ongoing supply concerns and weather-related crop risks.
Sugar futures edged back towards the previous session’s one-year highs on Friday as traders continued to weigh India’s decision to open the door to duty-free imports of raw sugar. The move, announced by New Delhi on Thursday, is intended to cool domestic prices that have climbed sharply in recent weeks and has given the market a fresh bullish signal.
Raw sugar on ICE finished 0.5% higher at 17.61 cents a pound after touching 18.26 cents on Thursday, the strongest level in more than a year. The contract has risen about 6% this week. White sugar was little changed at $551.60 a tonne after reaching its highest level since March 2025 on Thursday, and it has advanced 7.9% over the week.
According to Indian media reports, the government will allow duty-free imports of 1 million metric tonnes of raw sugar until 31 October, its first such move in nearly a decade. The policy is designed to ease supply tightness ahead of the festival season and comes alongside tighter stock limits for large consumers. Traders are also watching for confirmation of how quickly the imports can be arranged and whether they will be enough to temper prices at home.
The rally has been supported by broader supply concerns. Dry weather in parts of Europe, heavier-than-usual rain in Brazil in June and the risk of more severe conditions in Asia under El Niño have all kept attention on crop prospects. Industry assessments cited by regional and global agencies suggest the weather pattern can curb cane yields across Asia, while food and agriculture monitors have warned that lingering drought conditions can continue to pressure production and prices in several regions.
Elsewhere in soft commodities, London cocoa slipped 0.3% to £4,325 a tonne, though it still recorded a weekly gain of 4%. Market participants are watching West Africa closely as the European Union prepares to enforce anti-deforestation rules, with exporters warning that compliance could complicate buying and shipments and potentially tighten ICE inventories. In New York, cocoa fell 0.5% to $6,034 a tonne, but remained up 5% for the week.
Coffee was weaker. Robusta dropped 2.9% to $3,618 a tonne and arábica lost 2% to $3.2265 a pound. Traders are factoring in rising exchange stocks and a crop in Vietnam that is developing well so far, even as growers and exporters continue to treat El Niño as a key risk. In Colombia, the coffee crop was said to have avoided serious damage from this month’s earthquake, leaving weather patterns as the main concern for producers.
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