Global Sugar Prices Fall, But EU Market Remains Resilient at Elevated Levels

ICE Sugar No. 5 prices continue downward, particularly for short-term contracts in 2025. In contrast, the EU sugar market maintains its elevated pricing levels, highlighting a stark divergence between global and regional markets.

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Summary of Price Movements (Closing Prices in EUR/t):

• March 2025: €436.36 (-€3.96, -0.91%)
• May 2025: €435.34 (-€3.86, -0.89%)
• August 2025: €425.96 (-€3.22, -0.76%)
• October 2025: €424.40 (-€2.58, -0.61%)
• December 2025: €427.98 (-€2.39, -0.56%)

Long-Term Contracts (2026-2027):

• March 2026: €433.50 (-€2.48, -0.57%)
• May 2026: €436.26 (-€2.30, -0.53%)
• August 2026: €438.29 (-€1.93, -0.44%)
• October 2026: €438.84 (-€1.01, -0.23%)
• December 2026: €439.85 (-€0.18, -0.04%)
• March 2027: €441.88 (-€0.18, -0.04%)
• May 2027: €440.13 (+€0.09, +0.02%)
• August 2027: €439.30 (+€0.09, +0.02%)
• October 2027: €438.66 (+€0.09, +0.02%)

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EU Sugar Market Dynamics

In contrast to the global market’s declining prices, the EU sugar market remains at elevated levels, with prices ranging between €0.72 and €0.76/kg, depending on granulation and order volume. Several factors drive this price disparity:

1. Limited Competition:
   • Duty-free sugar imports from Ukraine are capped at 100,000 tons, insufficient to significantly impact EU prices. Additionally, current offers from Ukrainian producers are limited.
2. High Production Costs:
   • EU producers face rising energy costs and stringent environmental regulations, which elevate production expenses and justify higher local prices.
3. Strategic Pricing by EU Producers:
   • EU sugar producers leverage their market dominance to sustain high prices, even as global prices decline. This strategy ensures profitability amid local demand.

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Global vs. EU Market Divergence

While ICE Sugar No. 5 prices are under pressure due to high global supply and weakening demand, EU prices remain resilient. This divergence reflects the protective nature of the EU market, where local producers maintain strong control over pricing despite external trends.

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Conclusion

The global sugar market continues to experience downward pressure, with ICE Sugar No. 5 prices declining across short- and medium-term contracts. However, the EU market operates in stark contrast, maintaining high prices due to limited competition and high production costs. Market participants should carefully consider these dynamics when planning strategies, balancing global opportunities with the challenges of operating in the EU market.

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