Fiscal turmoil in Brazil and a worldwide sugar surplus have seen the sweet commodity slump to a six-year low.
The October futures contract for sugar tumbled to 10.89 US cents a pound in New York on Monday.
Greenpool commodity analyst Tom McNeill said the devaluation of the Brazilian real against the US dollar had added to the “punishment” being “inflicted” on the traditionally volatile raw sugar market.
“We’re coming from a situation where we’ve had five years of surplus in the market,” he explained.
“They’re [Brazil] exporters of 20 to 22 million tonnes a year … they are by far the largest producer and exporter, and the largest hedger in the commodity market for sugar.”
The Brazilian currency has fallen in value significantly over the past 12 months as the country’s government battles rising debt and increasing political unrest.
“Inflation is high, interest rates are being pushed higher and the currency is falling as a result,” said Mr McNeill.
“It is a little difficult to see the end for this situation in falling sugar prices because Brazil is the biggest producer.”