"Sugar Prices Continue to Decline – Market Faces Further Correction"

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Closing Prices on February 7, 2025 (ICE Sugar No. 5) Converted to EUR

Using a USD/EUR exchange rate of 0.92, the latest closing prices for ICE Sugar No. 5 in EUR are as follows:

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Market Analysis: Sugar Prices Decline for the Second Consecutive Session

1. Correction Phase Continues:
   • The March 2025 contract fell -0.91% to €476.28/t, extending losses from the previous session.
   • The May 2025 contract declined -1.11% to €462.30/t, marking the sharpest drop among active contracts.
   • Longer-term contracts remained relatively stable, with minimal declines below -0.5%.
2. Weak Buying Interest Drives Prices Lower:
   • After a strong rally in late January, traders appear to be adjusting positions and locking in profits.
   • The latest data suggests that supply fears related to India’s lower production have already been priced in, reducing speculative demand.
3. EU Sugar Market Remains Unchanged:
   • Prices in the EU remain stable at €0.50/kg to €0.54/kg FCA EU, with low demand continuing to dominate the market.
   • Major buyers have already secured contracts, leaving around 30% of sugar volumes still uncovered.
   • The lack of immediate demand in Europe further contributes to market weakness.

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Market Outlook: Where Will Prices Go Next?

📈 Potential Rebound:

• If global demand strengthens or fresh supply disruptions occur, prices could find support and stabilize.
• The market is also watching India’s potential export restrictions, which could trigger a short-term rebound.

📉 Further Declines Possible:

• If speculative buying continues to slow, prices could see additional corrections.
• The lack of EU demand remains a bearish factor, limiting upward momentum.

🔍 Strategic Recommendations:

• Buyers should monitor the market closely, as price corrections could present short-term buying opportunities.
• Producers should consider hedging, given the recent volatility in sugar prices.

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Conclusion

Sugar prices continue to decline, with traders adjusting their positions after a strong rally in January. The EU market remains stable, while global sugar demand has yet to provide fresh buying pressure. Whether the correction phase extends further will depend on upcoming market developments, particularly in India and key importing regions.

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