September readings: raw sugar averaged 18.4 cents a pound (up about 6%), the ICO coffee index fell 8.7%, and Malaysian palm oil stocks rose 24.5% to 3.51 million tonnes. Panama reopened some booking room on 21 October. El Niño is intensifying, but these four markets are answering to different conditions.
NOAA’s Climate Prediction Center said on 8 October that a strong to very strong El Niño is likely through January to March 2027. The ocean signal keeps building. The commodity signals do not move in lockstep with it, and this edition is about why.
Four readings, four different clocks: a monthly sugar benchmark, a monthly coffee index, Malaysian palm oil inventories, and a canal booking rule. Each has its own date, comparison period and next checkpoint below. We keep three things distinct: observed changes, explanations reported by sources or commentators, and quantified attribution to El Niño. None of the four readings here carries a quantified El Niño attribution, and a reported explanation is something to assess, not a finding. Nothing here is a trade recommendation.
| Signal | Latest verified reading and date | Compared with | Next checkpoint |
|---|---|---|---|
| Sugar | ISO benchmark 18.4 ¢/lb, September average. ICE March 2027 futures closed at 20.13 ¢/lb on 22 Oct (vendor close). | August average, about 17.4 ¢/lb (derived from ISO’s stated rise of 1.0 ¢). Futures: 14 Oct intraday high near 21.3 ¢. | ISO October report (date unconfirmed); Indian arrivals before the 31 Dec deadline |
| Coffee | ICO composite 262.18 ¢/lb, September average. ICE December arabica 312.45 ¢/lb on 22 Oct (vendor close, −1.17%). | August composite 287.29 ¢/lb. Futures: 316.15 ¢ close on 21 Oct, 294.80 on 15 Oct. | ICO October report (date unconfirmed); certified arabica stocks into December expiry |
| Palm oil | Malaysian total stocks 3.51 Mt, end-September (MPOB, preliminary). | End-August 2.82 Mt (revised). Month on month, not year on year. | MPOB October data, usually about the 10th of November (unconfirmed) |
| Panama Canal | Last-minute Panamax reservations reinstated 21 Oct (ACP Advisory A-39-2026). 33 daily slots from 15 Oct. | 32 daily slots from 15 Sept. Draft limit 49 ft from 29 Sept advisory. | ACP October operations summary (September’s appeared 9 Oct); Gatun Lake level |
The monthly figures are context. For current direction, the table adds the 21 and 22 October futures levels, which are data-vendor closes and not independently verified ICE settlements (see the data vintage note).
The International Sugar Organization’s benchmark averaged 18.4 cents a pound in September, up 1.0 cent or about 6% from August. ISO also reports that prices rose sharply in early October, with ICE March 2027 futures moving above 20 cents. These are two different things: the first is ISO’s own benchmark price averaged over a month, the second is a single futures contract, and their levels should not be compared with each other.
On the futures side, March 2027 raw sugar (ICE No. 11) closed at 20.13 cents on 22 October, down 1.56% on the day, according to Investing.com’s daily data. Its intraday high on 14 October was about 21.3 cents, a 19-month high in Reuters’ words, so the 22 October close sits about 5% below that high. Reuters, as carried by Business Recorder, added that funds hold a record long position and that traders see the market as vulnerable to a correction. Those are market-positioning claims, not weather ones.
The fresh hook is policy. India’s Directorate General of Foreign Trade has extended the deadline for importing duty-free raw sugar under its one million tonne tariff-rate quota from 31 October to 31 December (Notification 45/2026-27, dated 19 October and published in the Gazette of India on 22 October). The quota is unchanged. The extension gives importers more time. It does not add tonnage, and it does not show how much has arrived. One report, from Upstox, puts imports so far at about 260,000 tonnes and says industry sources describe imports as subdued for lack of price parity with overseas supply. We have not seen that figure elsewhere.
What is driving the market depends on the source. Trading Economics cites heavy Brazilian rain, linked there to El Niño, disrupting Center-South cane harvesting, plus India’s weakest monsoon in over a decade and an instruction to Indian state fuel retailers to stop buying sugar-based ethanol from 1 November. Price Futures Group’s 22 October softs report cites Brazilian refiners favouring ethanol on higher oil prices, returning rain in the Center-South and lower Indian output. Neither attribution is a measured El Niño contribution. Our reading: a plausible El Niño link exists through Indian monsoon weakness and Brazilian rain, but oil, ethanol policy and fund positioning are in the same list, and no source separates them.
Checkpoint: ISO’s October report (date unconfirmed) will show whether the monthly average held above September’s 18.4 cents, and arrival figures before 31 December will show how much of the quota was used.
The International Coffee Organization’s composite indicator averaged 262.18 cents a pound in September, down 8.7% from 287.29 in August. As relayed by Business Today, the ICO pointed to larger Brazilian supplies and an expected global surplus, while uncertainty over El Niño and low certified arabica stocks limited the decline. On that evidence, supply outweighed weather concerns in September’s average.
The monthly average is not the current direction. Investing.com’s December arabica series (KCZ6) rose from a 294.80 close on 15 October to 316.15 on 21 October, then closed at 312.45 on 22 October, down 1.17% on the day (vendor closes). Reuters, via Business Recorder, described arabica trading near a six-week high, with green coffee stocks in Japan and Europe lower in August than a year earlier. Trading Economics reports certified arabica stocks near 240,000 bags, its lowest in about 27 years, a figure we could not check against ICE. These are separate facts about different measures: the ICO composite, which includes robusta and other groups, declined in September, and the December arabica contract subsequently rose. We do not compare the two levels.
Price Futures Group lists the October drivers as slower Brazilian selling, a nearly finished Brazilian harvest, quality concerns tied to excess rain, and drought-related premiums in Central America. The reports describe excess rain as a quality concern; they do not quantify an El Niño contribution or crop-volume loss. Checkpoint: the ICO’s October report (date unconfirmed) and the trend in ICE certified stocks into the December contract’s expiry.
The Malaysian Palm Oil Board’s preliminary September data, with August revised, show a large inventory build:
| Measure | August, revised | September, preliminary | Change |
|---|---|---|---|
| CPO production | 1,817,499 t | 2,116,950 t | +16.48% |
| Total palm oil stocks | 2,819,061 t | 3,510,896 t | +24.54% |
| CPO stocks | 1,640,268 t | 2,163,173 t | +31.88% |
| Palm oil exports | 1,275,099 t | 1,120,395 t | −12.13% |
Crude palm oil output rose to about 2.12 million tonnes, total stocks to about 3.51 million, and exports fell 12.13% to about 1.12 million. Two cautions. These are month-on-month changes, and palm output is strongly seasonal, so a September rise does not by itself signal anything unusual; we have not compared against September 2025. Second, the biological effect of a dry period on palm yields appears months later, so September output cannot confirm or refute an El Niño effect either way.
It also does not speak to Indonesia. Our 21 October Kapuas post covered low river levels restricting palm oil shipments and fruit purchases in West Kalimantan, with losses still unquantified. Malaysian stocks building while one Indonesian region struggles with transport is not a contradiction, because they are different countries and different bottlenecks. Checkpoint: MPOB’s October figures, usually about 10 November (unconfirmed), will show whether the stock build continued.
On 21 October the Panama Canal Authority issued Advisory A-39-2026, which reinstates last-minute reservations at the Panamax locks with immediate effect. Slots are offered under its Notice to Shipping N-07 and only when the authority decides to release one. La Estrella de Panamá, reporting the same day, says availability had earlier been reduced because of climate variability and El Niño, and that the authority cites water-saving measures and rainfall near the historical average in the watershed. We read the advisory through a text extract, and the reasons given for the change come from La Estrella’s report.
This follows an easing on 29 September, when the authority raised the Neopanamax draft limit to 14.94 metres (49 feet) and announced 10 daily Neopanamax transits and 33 total daily slots from 15 October. Our earlier post had the total at 32 from 15 September, with 9 Neopanamax and 23 Panamax slots, so the Panamax figure appears unchanged at 23 (our derivation, since the advisory gives the Neopanamax and total figures).
| Panama Canal | Neopanamax daily slots | Panamax daily slots | Total daily slots |
|---|---|---|---|
| From 4 Sept | 9 | 25 | 34 |
| From 15 Sept | 9 | 23 | 32 |
| From 15 Oct | 10 | 23 (implied) | 33 |
The authority’s monthly summary for September, dated 9 October, shows 979 oceangoing transits, an average of 32.63 a day, and average time in Canal waters of 37.97 hours, with a daily high of 78.15. It lists Neopanamax bookings used at 134 against 125 available, or 107.2%. Advisory A-39-2026 itself says that while the watershed water deficit persists a booking is the only way to guarantee a transit date, and that vessels without a reservation may experience extremely extensive delays. No source we read gives a Gatun Lake level. Checkpoint: the October operations summary and any change to the last-minute rule as rainfall patterns change.
Sugar strengthened in September and early October on a mix of weather, policy and positioning. September’s ICO composite fell; separately, December arabica rose between October 15 and 22. Malaysian palm stocks accumulated on a seasonal output rise and weaker exports. Panama offered limited booking relief, with a water deficit still on the record. The shared backdrop is a strengthening El Niño, and the shared lesson is to keep observed changes, reported explanations and quantified attribution apart.