Global Sugar Prices Surge While EU Market Remains Stable – Supply Concerns Drive Volatility

Global sugar prices are continuing their rally, with ICE Sugar No. 5 contracts rising. The March 2025 contract closed at $549.90/t (+0.84%), while May 2025 surged by 2.08% to $529.40/t. Market participants cite concerns over tightening supplies from India and strong speculative activity as key drivers. In the EU, prices remain stable between €0.52/kg and €0.56/kg FCA, with demand still weak.

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ICE Sugar No. 5 Price Movements (Converted to EUR) – February 13, 2025

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

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European Sugar Market Overview

• EU sugar prices remain stable at €0.52/kg - €0.56/kg FCA.
• Demand remains weak, with 70% of supply already contracted for the year.
• Speculative activity in global futures markets has yet to influence the European spot market.
• Traders are watching whether global supply constraints could spill into EU prices in the coming weeks.

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Key Global Factors Driving Sugar Prices Higher

1. India's Declining Sugar Production
   • Due to adverse weather and disease outbreaks, India’s sugar output is expected to fall by 17% to 26.52 million tons.
   • India’s domestic sugar stocks could drop below two months’ worth of demand, making exports unlikely.
   • This development is creating additional price support in the global market.
2. Strong Speculative Trading on ICE Sugar No. 5
   • Futures contracts are rallying, driven by hedge funds and commodity traders betting on supply shortages.
   • March 2025 contracts have increased by nearly 15% since the start of the year.
3. EU Market Stability vs. Global Volatility
   • Despite the global rally, European sugar prices remain unchanged due to weak industrial demand.
   • 30% of sugar demand remains uncovered, which could spark last-minute purchasing and eventually impact prices.

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Market Outlook: What’s Next?

📈 Bullish Factors:

• Ongoing tight supply concerns in India, Thailand, and Brazil.
• Speculative buying activity could push futures prices even higher.
• Potential last-minute EU demand as uncovered supply becomes an issue.

📉 Bearish Factors:

• Weak European demand could keep regional prices stable despite the global rally.
• Large global sugar inventories outside India may limit further price increases.
• Seasonal trends suggest prices could stabilize after peak speculation.

📊 Final Takeaway:The sugar market remains highly volatile, with global futures prices surging while the EU market stays steady. Traders should monitor global supply trends closely, as any further disruptions—especially from India—could spill over into European pricing.

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