Sugar prices remain under pressure from record surplus

The global sugar market faced a significant drop in prices in 2025. The cost of raw sugar No. 11 has fallen by more than 20% since the beginning of the year, renewing the lows from October 2020. The main reason is the expected transition of the market from a deficit to a large-scale surplus of supply against the background of favorable conditions in sugarcane-producing countries and a drop in oil prices.

 

On the London Stock Exchange, March futures for white sugar No. 5 fell by 3.1% to $415.9/tonne over the week (-1% per month, -17.8% per year).

 

March futures for cane sugar No. 11 in the US fell 2.5% to $14.48/lb or $319/t (-1.5% for the month, -33% for the year) during the week.

 

The key factors influencing the market were:

• The global surplus, which analysts predict in 2025/26 MY at 7-8.7 million tons (after a deficit of 2 million tons a year earlier), could be the largest surplus since 2017.
• The resumption of production in India, which, thanks to favorable monsoons, could grow by 19-25% (to 33-35 million tons). The country's government has already begun discussing permission for additional exports of 1-1.5 million tons.
• Record processing in Brazil, which will reach more than 600 million tons of cane. However, low world prices may force factories to process more raw materials into ethanol rather than sugar, which will slightly curb the decline in quotes.
• Thailand's sugarcane production is forecast to increase by 12% to 11 million tonnes due to increased planting areas and favorable weather.

 

Prices in Europe have fallen by 30% in a year due to high domestic production and imports. The EU has imposed restrictions on the import of Ukrainian sugar (limit 100 thousand tons), which, against the background of a decrease in beet crops in Europe, should stabilize prices in the region in 2026.

 

The greatest pressure on prices is expected in the third quarter of 2026, during the peak harvest in Brazil.

 

The European Sugar Federation (EFS) and the International Confederation of European Sugar Beet Growers (CIBE) have appealed to European institutions to urgently respond to the deteriorating situation on the EU sugar market. They are demanding to limit the import of raw sugar for the needs of processing enterprises, in particular from Ukraine and the MERCOSUR countries, NV.Business reports with reference to Interfax-Ukraine.

 

According to the National Association of Sugar Producers of Ukraine "Ukrsugar", in 2025 the EU announced the closure of five sugar factories, and another one will cease processing in 2026.

 

In addition, the price of sugar continues to decline on the European market, having fallen by 38% since December 2023 amid global overproduction and speculative fluctuations. The area under sugar beet in the EU in 2025/26 MY decreased by almost 11%, although yields may partially compensate for this decrease, which in turn creates the risk of significant ending stocks.

 

Ukrtsukra notes that imports under the inward processing regime (IPP), new import quotas from Ukraine, and possibly from MERCOSUR, are increasing pressure on EU producers.

 

European and Ukrainian companies are already making decisions on sowing for the 2026/27 MY and predict a further significant reduction in the area under beets.