Sugar Market Report: Prices Under Pressure Amid Global Surplus

The sugar market is experiencing downward pressure as increased production in key regions and a surplus in the European Union weigh on prices.

---

Current Price Movements

On November 19, 2024, ICE Sugar No.5 futures in London showed mixed performance:

• March 2025 Contract: Closed at 568.70 USD/t, down 4.80 USD (-0.84%).
• May 2025 Contract: Closed at 563.60 USD/t, down 3.30 USD (-0.59%).
• August 2025 Contract: Dropped 1.10 USD (-0.20%) to 550.00 USD/t.
• October 2025 Contract: Slight increase of 0.10 USD (+0.02%) to 537.50 USD/t.
• December 2025 Contract: Gained 0.40 USD (+0.07%) to 533.60 USD/t.

Short-term contracts declined due to oversupply concerns, while longer-term contracts remained stable, reflecting optimistic optimism for future market recovery.

---

Global Production and EU Surplus

• European Union:The EU faces a seasonal sugar surplus despite slightly lower production than last year.
  • Production: Estimated at 16 million tons for 2024/25, exceeding demand.
  • Stock Levels: High carryover stocks from the previous season further pressure prices.
  • Exports: EU producers seek international markets to offload surplus, but competition with Brazil and India remains strong.
• Brazil:
  • Production rose 8% in early October to 2.44 million tons year-on-year.
  • Total output for 2024/25 is projected at 35.59 million tons, a 1.9% increase from last year.
• India:
  • Refiners await government approval for 2 million tons of sugar exports to reduce domestic oversupply.

---

Market Sentiment and Factors

1. Oversupply:High production in Brazil, India, and the EU creates significant downward pressure on prices.
2. Weather Conditions:Anticipated rainfall in Brazil may ease drought concerns, further boosting supply.
3. Demand:Weak demand in key markets, mainly Europe and Asia, continues suppressing prices.

---

Conclusion

Global sugar prices are under pressure as surplus production dominates the market. Near-term contracts reflect weak sentiment, but the stability in long-term futures suggests potential recovery. To navigate upcoming challenges, market participants should closely monitor global production levels and export strategies from the EU, Brazil, and India.