Current Sugar Market Report: Slight Correction in ICE Sugar No. 5 Futures and EU Price Pressure

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1. Market Developments (As of December 4, 2024)

ICE Sugar No. 5 futures experienced slight declines across all contracts. Closing prices in EUR (based on the current exchange rate of 1 USD = 0.92 EUR) are as follows:

• March 2025: €506.37/t (-0.51%)
• May 2025: €505.17/t (-0.46%)
• August 2025: €494.59/t (-0.39%)
• October 2025: €484.01/t (-0.34%)
• December 2025: €479.50/t (-0.33%)

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2. Developments in the EU Sugar Industry

EU market participants expect sugar producers to continue pushing for price increases. Current FCA prices range between €0.48/kg and €0.52/kg, but several factors are tempering the market:

• Ukrainian Imports: Starting January 2025, a limited quota of Ukrainian sugar will be imported duty-free. Current FCA prices for Ukrainian sugar are €0.42/kg, potentially increasing market pressure.
• Global Market: High global supply keeps world market prices under pressure, making it difficult for EU producers to offload surplus volumes at competitive margins.
• Pricing Strategies: The anticipation of cheaper Ukrainian imports is slowing down price adjustments within the EU sugar industry.

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3. Observations and Trends

• Price Correction: ICE Sugar No. 5 Futures show a slight downward trend, reflecting profit-taking and stable global supply levels.
• Price Levels: Current world market prices hinder producers' ability to manage surpluses at profitable margins.
• EU Industry Challenges: The combination of global pressure and cheaper Ukrainian imports dampens prices.

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4. Recommendations

• For Traders: Take advantage of potential buying opportunities from short-term price dips. Monitor developments in the Ukrainian market closely.
• For Producers: Strategic pricing adjustments are essential to maintain competitiveness, particularly with the incoming duty-free imports.
• For Investors: Market opportunities may arise from fluctuations in near-term contracts, particularly in March and May 2025.

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The sugar market continues to be shaped by global and regional factors. Market participants should closely monitor developments in the EU, particularly the impact of Ukrainian imports—further updates to follow.