Global Sugar Prices Decline While EU Market Defies Trends with Price Increases

Current Developments in Sugar Prices (as of January 14, 2025)

Sugar prices on the ICE (Contract No. 5) have seen significant declines in recent trading days. The most notable drops occurred in near-term contracts, while later contracts remained more stable.

Summary of Price Movements:

• March 2025: Closing price at 481.20 USD/t, a decline of -15.20 USD/t (-3.16%).
• May 2025: Closing price at 485.40 USD/t, a decline of -15.80 USD/t (-3.26%).
• August 2025: Closing price at 477.50 USD/t, the steepest decline with -15.90 USD/t (-3.33%).
• October 2025: Closing price at 477.20 USD/t, a decline of -13.10 USD/t (-2.75%).
• December 2025: Closing price at 480.50 USD/t, a more moderate drop of -10.40 USD/t (-2.16%).

Prices for contracts in 2026 and beyond show smaller losses:

• March 2026: Closing price at 484.50 USD/t (-7.60 USD/t, -1.57%).
• December 2026: Closing price at 486.10 USD/t (-0.60 USD/t, -0.12%).
• March 2027: Closing price at 487.60 USD/t (-0.90 USD/t, -0.18%).

Prices in the EU:

Price Increases Despite Falling Global Prices

The EU sugar industry is defying global trends by raising prices by €0.02/kg. Current FCA prices now range between €0.54 and €0.56/kg, equivalent to delivered prices of €0.60 to €0.62/kg. In contrast, Ukrainian sugar is being offered at more competitive prices of €0.52 to €0.54/kg FCA at EU warehouses.

Contrasting Global Trends

• ICE Sugar No. 11: Futures contracts for March and May 2025 fell by 1.69% and 0.84%, respectively, reflecting weaker global demand and high supply.
• EU Price Increases: Despite global market pressures, EU producers are raising prices, likely due to seasonal demand and higher production costs.

Factors Influencing the EU Market

1. Easter Demand: The upcoming Easter season traditionally drives higher sugar demand, allowing producers room for price adjustments.
2. Limited Alternatives: Although Ukrainian sugar offers a cheaper option, logistical challenges and quality requirements may limit its appeal.
3. Market Power of EU Producers: The ability to implement price increases highlights the strong position of the EU sugar industry.

Market Activity:

The highest trading volumes were observed in near-term contracts:

• March 2025: 13,789 units traded.
• May 2025: 8,518 units traded.
• August 2025: 3,579 units traded.

Longer-dated contracts, particularly from 2026 onwards, show significantly lower trading activity, indicating limited interest or uncertainty regarding long-term market developments.

Recommendations:

• For Buyers: Consider Ukrainian offers as a cost-effective alternative, especially for larger volumes.
• For Producers: Leverage the Easter season to maximize demand and margins while monitoring competition from non-EU countries.
• For Investors: The divergence between global and EU prices could present opportunities for strategic investments in futures or regional participation.

Outlook:

Current price movements may indicate short-term consolidation or overreaction. Should climatic conditions stabilize and geopolitical disruptions remain minimal, a slight recovery in prices is possible. Long-term trends will depend heavily on production levels and global demand.

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Conclusion: ICE sugar prices are currently experiencing significant losses, especially in short-term contracts. At the same time, the EU market remains under pressure with high spot prices, which may challenge the competitiveness of the European sugar industry. Market participants should closely monitor developments and adjust trading strategies accordingly.



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