EU Sugar Prices Continue Upward Trend Amid Global Market Volatility

Sugar prices in the EU have continued their upward movement, now ranging between €0.52/kg and €0.56/kg FCA. The ICE Sugar No. 5 futures have surged, with the March 2025 contract climbing by 2.29% to $545.30/t. This increase is driven by strong speculative demand and concerns over India’s declining sugar output. With European demand still sluggish, the question remains whether this rally is sustainable or a temporary spike.

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Latest Developments in ICE Sugar No. 5 (Converted to EUR) – February 12, 2025

With the current exchange rate of 0.92 USD/EUR, the adjusted closing prices for Sugar No. 5 are:

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EU Sugar Market Overview

• Sugar prices in the EU have slightly increased to €0.53/kg—€0.57/kg FCA.
• Market analysts suggest that 30% of the required sugar volumes remain uncovered, which could trigger additional purchases.
• Despite rising futures, demand in the EU remains subdued, as most large buyers have already secured long-term contracts.
• The market anticipates price volatility as traders speculate on supply constraints and export limitations.

Key Global Drivers Pushing Prices Higher

1. India’s Sugar Crisis:
   • Due to adverse weather and disease outbreaks, India’s sugar production is expected to decline by 17% to 26.52 million tons.
   • The country's sugar stocks are projected to fall below two months’ worth of domestic demand, leading to restricted export capacity.
   • Festival season demand in October-November could further tighten India’s supply.
2. Increased Speculation in the Futures Market:
   • The strong price movement on ICE Sugar No. 5 suggests heightened speculative activity from traders anticipating further price gains.
   • The March 2025 contract has jumped by over 10% in the last two weeks, signalling bullish sentiment in the market.

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What’s Next for Sugar Prices?

📈 Why prices could rise further:

• Tightening supply from India, Thailand, and Brazil.
• Increased speculative trading activity supporting higher futures prices.
• The remaining 30% of uncovered sugar volumes in the EU may drive further spot-market demand.

📉 Why prices could stabilize or decline:

• Weak EU consumption trends may limit domestic price increases.
• Global sugar inventories remain sufficient despite India’s decline.
• Seasonal demand fluctuations could bring temporary corrections.

📊 Final Outlook:While the EU sugar market remains stable, the global rally in ICE Sugar No. 5 continues to push futures higher. Whether these increases will spill over into the EU spot market remains uncertain. Market participants should closely monitor global production reports and demand trends to gauge future movements.

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