Current Sugar Market Report: ICE Sugar No. 5 Sees Slight Declines

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1. Market Developments (As of December 5, 2024)

ICE Sugar No. 5 futures showed slight declines across most contracts on December 5, 2024. Closing prices in EUR (based on an exchange rate of 1 USD = 0.92 EUR) are as follows:

• March 2025: €506.18/t (-0.04%)
• May 2025: €504.44/t (-0.15%)
• August 2025: €493.40/t (-0.24%)
• October 2025: €482.26/t (-0.36%)
• December 2025: €478.58/t (-0.19%)

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2. Observations and Trends

• Mild Downtrend: Futures prices continue to decrease slightly, with longer-term contracts showing steeper declines.
• Market Liquidity: Trading activity remains concentrated in near-term contracts (March and May 2025), with over 7,600 units traded for the March contract.
• Global Dynamics: The price movements reflect the persistent global sugar surplus, which continues to put downward pressure on prices.

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3. Developments in the EU Sugar Industry

• Current FCA Prices: EU sugar prices remain stable between €0.48 and €0.52/kg, while overcapacity continues to exert pressure.
• Ukraine in Focus: From January 2025, duty-free Ukrainian sugar imports will be allowed in limited quantities, prompting cautious market behavior. The current FCA price for Ukrainian sugar stands at €0.42/kg.
• Pricing Strategies: EU producers are struggling to sell surplus volumes at desired margins, particularly given the current low global market prices.

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4. Recommendations

• For Traders: Monitor short-term fluctuations in near-term contracts (March and May 2025) to capitalize on lower purchase prices.
• For Producers: Strategic adjustments are necessary to address market dynamics, especially with incoming Ukrainian imports.
• For Investors: Use the low volatility in longer-dated contracts for risk management and hedging.

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Market participants should continue to closely monitor global and regional developments, particularly the impact of Ukrainian imports and persistent EU overcapacity. Further updates will follow.