Current Sugar Market Report: ICE Sugar No. 5 Continues Downward Slide

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"Falling Prices, Growing Uncertainty: Sugar Prices Extend Downtrend"

As ICE Sugar No. 5 futures recorded significant losses across all contracts, sugar prices remain under pressure. Market participants see no signs of relief as global oversupply and the looming competition from Ukrainian imports weigh on prices. How much further will sugar prices fall? Read on for all the details.

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1. Market Developments (As of December 17, 2024)

ICE Sugar No. 5 futures extended their decline on Tuesday, with substantial price drops across all contracts. Converted into EUR (at an exchange rate of 1 USD = 0.92 EUR), the closing prices are as follows:

• March 2025: €473.80/t (-2.80%)
• May 2025: €475.55/t (-2.65%)
• August 2025: €465.80/t (-2.19%)
• October 2025: €459.45/t (-1.98%)
• December 2025: €458.07/t (-1.81%)

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2. Observations and Trends

• Significant Losses: March (-2.80%) and May (-2.65%) were the most affected contracts, and due to high trading volumes, the trend was downward.
• Trading Activity: The March contract remained the most actively traded with 14,305 units, followed by the May contract with 4,635 units.
• Global Factors: Price declines reflect growing pressure from oversupply and weak global demand, which continue to dominate the market outlook.

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3. Developments in the EU Sugar Market

• Mounting Price Pressure: Despite stable EU sugar prices between €0.50 and €0.52/kg, the downward trend in global markets is increasing pressure on EU producers.
• Ukrainian Imports: The anticipated duty-free sugar imports from Ukraine starting January 2025 are expected to add further pressure to prices.
• Producers Under Scrutiny: EU sugar producers remain hesitant to adjust prices downward, but market participants anticipate a correction soon.

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4. Recommendations

• For Traders: Take advantage of current price declines for strategic purchases in near-term contracts such as March and May 2025.
• For Producers: Strengthen hedging strategies to protect against further price drops.
• For Investors: Short-term trading opportunities exist due to high volatility, but long-term positions should be cautiously approached.

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Conclusion

Sugar prices remain trapped in a downward trend. The significant losses in ICE Sugar No. 5 futures highlight mounting uncertainty and global oversupply. Market participants closely watch developments in the EU, where price pressure is growing. The coming weeks will determine whether the anticipated price correction materializes or if the downward momentum continues.

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