World sugar prices fall to five-year low amid further decline in demand

Global sugar prices fell to their lowest level in more than five years last week as demand continued to fall, with the rise of weight-loss drugs accelerating the decline in sugar consumption as consumers increasingly turn away from sweets in favor of protein-rich foods, The Financial Times reported.

 

On Thursday, quotes extended a five-month decline and reached a 5.25-year low for near-term futures. Additional pressure on the market is being exerted by expectations that the global surplus will remain. Last Wednesday, analysts at trader Czarnikow said they forecast a global sugar surplus in the 2026/27 season at 3.4 million tons. Although this is less than the surplus of 8.3 million tons in the 2025/26 season, the surplus will continue to contribute to the accumulation of global stocks.

 

On the London Stock Exchange, May futures for white sugar No. 5 decreased by 3.3% over the week to $397.1/t (–7.6% per month, –28.5% per year).

May futures for cane sugar No. 11 in New York fell 1.8% to $13.49/lb or $297/t (–7.5% month-on-month, –36% year-on-year), the lowest since October 2020. According to traders, this reflects a faster-than-expected slowdown in consumption in the US and other developed countries, while demand in developing countries is growing more slowly than expected.

 

A key factor in reducing consumption has been GLP-1 weight loss injections, which activate the glucagon-like peptide-1 receptor, a hormone that causes feelings of fullness. This mechanism underlies Novo Nordisk's Wegovy and Ozempic, and Eli Lilly's Mounjaro and Zepbound.

The first tablet forms of GLP-1, which make the drugs more affordable and expand their use, were approved in December. Analysts believe that the impact of these drugs on demand will grow as they become cheaper and more widely used.

 

Gurdev Gill of brokerage Marex said the fall in consumption, or the speed of its decline, had caught the sugar industry by surprise. However, he noted that supply would not be cut quickly by falling prices because sugarcane cultivation requires significant investment and a long production cycle, and farmers in many countries receive government support.

 

On the supply side, the market is also receiving signals of increased production. According to Unica, total sugar production in the Central-South region of Brazil in the 2025/26 season increased by 0.9% year-on-year to 40.236 million tons through mid-January. The share of cane destined for sugar production increased to 50.78% in 2025/26, compared to 48.15% in 2024/25.

 

The Indian Sugar Mills Association (ISMA) said on January 19 that India's sugar production in the 2025/26 season from October 1 to January 15 rose 22% to 15.9 million tonnes. On November 11, ISMA raised its production forecast for the 2025/26 season to 31 million tonnes from the previous 30 million tonnes, 18.8% higher than previously expected, thanks to the strongest monsoon season in five years. At the same time, the estimate of sugar destined for ethanol production was reduced to 3.4 million tonnes from the July forecast of 5 million tonnes, potentially allowing India to increase exports. India is the world's second-largest sugar producer.

 

Prices are being further pushed down by prospects of increased Indian exports. On Friday, the Indian government allowed exports of an additional 500,000 tonnes of sugar in the 2025/26 season, on top of the 1.5 million tonnes allowed in November.

 

In Ukraine, sugar prices also remain under pressure from a global decline in demand. They have fallen to UAH 18,000–19,000/t compared to UAH 23,000–24,000/t a year ago, which may negatively affect planting plans for the new crop.