Current Sugar Market Report: ICE Sugar No. 5 Ends Week with Further Losses
Current Sugar Market Report: ICE Sugar No. 5 Ends Week with Further Losses
"Contradictions in the Sugar Market: EU Prices Under Pressure – When Will the Correction Come?"
As global sugar prices continue falling, market participants closely watch the EU. In the past, sugar producers often justified price increases by pointing to rising world market prices. Now that prices are dropping significantly on the global market, expectations are growing for EU prices to follow suit. However, producers have only announced that planned price hikes in January will not occur–a statement many market participants find unconvincing. With growing oversupply, duty-free imports from Ukraine, and persistent global market pressure, EU sugar prices could be influenced in the coming weeks. How long can the industry withstand the pressure? Read on for the whole story.
1. Market Developments (As of December 13, 2024)
ICE Sugar No. 5 Futures recorded further losses across all contracts as of December 13, 2024. Closing prices in EUR (based on an exchange rate of 1 USD = 0.92 EUR) are as follows:- March 2025: €485.76/t (-0.95%)
- May 2025: €488.15/t (-0.96%)
- August 2025: €477.85/t (-1.00%)
- October 2025: €470.49/t (-0.92%)
- December 2025: €468.92/t (-0.94%)
2. Observations and Trends
- Continued Decline: All contracts posted moderate losses, with the most significant drops observed in the August 2025 (-1.00%) and May 2025 (-0.96%) contracts.
- Trading Volume: The March contract remains the most liquid, with over 10,000 units traded, followed by May with nearly 5,000 units.
- Weekly Trend: The markets continued their downward trajectory, driven by global oversupply and ongoing uncertainties about demand.
3. Developments in the EU Sugar Market
- When Will EU Prices Fall? Many market participants are wondering when EU prices will start to decline. Previously, sugar producers often linked price increases to rising global market prices. With global prices falling, the market expects a similar adjustment in the EU.
- Market Contradictions: Recent statements from sugar producers that prices will not rise in January have not convinced many market participants, as no clear signals of price reductions have been provided.
- Future Imports: Upcoming duty-free sugar imports from Ukraine in January 2025 could further pressure EU prices, particularly amid growing oversupply and cautious demand.
4. Recommendations
- For Traders: Use declining prices to secure cost-effective purchases, particularly in near-term contracts like March and May 2025.
- For Producers: Strengthen hedging strategies to mitigate the risk of further price declines.
- For Investors: The ongoing volatility offers opportunities for short-term trading, particularly in the most actively traded contracts.
Conclusion
With global prices falling and pressure mounting on the European sugar industry, market uncertainty remains high. ICE Sugar No. 5 Futures posted further losses while market participants are scrutinising EU prices. The announcement that planned price hikes will not be implemented has not restored confidence among traders. The coming weeks will determine whether EU prices adjust and global markets stabilize.
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