Current Sugar Market Report: ICE Sugar No. 5 Extends Downtrend – Christmas Season Adds Pressure

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Holiday Calm on the Markets: No End in Sight for Sugar Price Declines

Sugar prices continue to fall, with the seasonal effects of the Christmas season amplifying the downtrend. Many buyers have already exited the market for the holidays, are waiting for further developments, or have secured their positions early. Read on to understand the latest trends and their impact on market sentiment.

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1. Market Developments (As of December 18, 2024)

On December 18, all ICE Sugar No. 5 futures contracts recorded losses, reinforcing the persistent global market downtrend. Converted into EUR (at an exchange rate of 1 USD = 0.92 EUR), the closing prices are as follows:

• March 2025: €470.67/t (-0.66%)
• May 2025: €471.68/t (-0.82%)
• August 2025: €461.56/t (-0.92%)
• October 2025: €455.77/t (-0.81%)
• December 2025: €454.48/t (-0.79%)

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2. Observations and Trends

• Seasonal Effects: The Christmas season is significantly dampening demand. Many buyers have already secured their positions or are waiting to see how the market develops before placing new orders.
• Weak Demand: A notable decline in trading activity further pressures prices.
• Global Factors: The prospect of additional duty-free imports from Ukraine starting January 2025 and ongoing oversupply continue to weigh heavily on the market.

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3. Developments in the EU Sugar Market

• Quiet Markets: Seasonal buyer hesitation is exacerbating uncertainty in the EU market.
• Rising Pressure: Despite stable prices between €0.50 and €0.52/kg, market participants remain doubtful that these levels can hold.
• Outlook for 2025: Incoming Ukrainian imports and the weak global market are expected to increase price pressure in the new year.

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4. Recommendations

• For Traders: Take advantage of the currently low prices for strategic purchases, especially in near-term contracts like March and May 2025.
• For Producers: Risk management through hedging remains essential to guard against further losses.
• For Investors: Volatility offers short-term opportunities, but caution is advised, given the long-term risks.

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Conclusion

Sugar prices remain entrenched in a downtrend, exacerbated by the Christmas season and its associated demand slowdown. Many market participants are taking a wait-and-see approach or have already secured their positions. The coming weeks will determine whether a stabilization is possible or if pressure on prices continues to build with the start of the new year.

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