📈 Sugar Prices Continue to Rise Amid Market Uncertainty
Global sugar prices continue to climb as concerns over supply constraints persist. ICE Sugar No. 5 futures saw steady gains, with the May 2025 contract reaching €520.38/t ($560.20/t). European sugar prices have also firmed, trading between €0.53/kg and €0.56/kg FCA. The key question remains: will the bullish momentum continue?
📊 Market Overview: ICE Sugar No. 5 Prices & Developments
| Contract | Closing Price ($/t) | Change ($) | Change (%) | Closing Price (€) |
|---|---|---|---|---|
| May 25 | 560.20 | +4.80 | +0.86% | €520.38 |
| Aug 25 | 541.10 | +5.30 | +0.98% | €502.73 |
| Oct 25 | 529.60 | +4.70 | +0.89% | €491.66 |
| Dec 25 | 523.30 | +4.40 | +0.84% | €485.79 |
| Mar 26 | 521.90 | +3.70 | +0.71% | €484.42 |
| May 26 | 518.10 | +3.10 | +0.60% | €481.08 |
📌 Exchange rate used: 1 USD = 0.93 EUR
🌍 Market Drivers & Influencing Factors
🔹 Tighter Global Supply 📉
- Sugar production in India’s Maharashtra region continues to decline, with 14 sugar mills shutting down early. This has led to a 16% drop in production compared to last year.
- Unfavorable weather and increased ethanol production have further tightened supply.
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🔹 European Sugar Market Trends 🇪🇺
- Prices in the EU increased from €0.53/kg to €0.56/kg FCA.
- Consumption in Europe is declining, but supply remains relatively stable due to strong domestic production and imports.
- Despite this, exports have been lower than expected, raising questions about stock levels.
🔹 Strong Demand & Import-Export Imbalances ⚖️
- Global sugar demand remains firm, particularly from China and Indonesia.
- The EU has imported substantial volumes from Brazil but has not exported as much as anticipated.
- Stock levels should be stable, but market speculation drives prices up.
🔮 3-Day Price Forecast
📉 Short-Term Outlook: Continued Volatility Expected
| Date | Expected Price Range (€) | Expected Price Range ($) |
|---|---|---|
| 22.02.2025 | €519 – €525 | $559 – $566 |
| 23.02.2025 | €518 – €527 | $558 – $569 |
| 24.02.2025 | €517 – €530 | $557 – $572 |
Market sentiment: Given the rising concerns about supply, sugar prices are expected to remain firm with slight bullish tendencies. However, short-term corrections cannot be ruled out.
⛅ 14-Day Weather Trend: Key Sugar-Producing Regions
🇮🇳 India (Maharashtra, Uttar Pradesh, Karnataka)
- High temperatures are expected, further impacting the already weakened cane crop.
- Rainfall in northern India may slightly ease drought concerns.
🇧🇷 Brazil (São Paulo, Minas Gerais, Paraná)
- Favourable harvesting conditions, but ethanol demand may push sugarcane allocation away from sugar.
🇹🇭 Thailand
- Below-average rainfall raises concerns about the next crop cycle.
📉 EU Sugar Market: Stock & Consumption Trends
| Year | Production (Mio. t) | Consumption (Mio. t) | Ethanol Use (Mio. t) | Imports (Mio. t) | Exports (Mio. t) | Ending Stocks (Mio. t) |
|---|---|---|---|---|---|---|
| 2021/22 | 16.8 | 17.3 | 2.4 | 1.9 | 1.0 | 2.0 |
| 2022/23 | 16.5 | 16.9 | 2.6 | 2.1 | 0.9 | 1.8 |
| 2023/24 | 16.2 | 16.5 | 2.5 | 2.2 | 0.7 | 1.7 |
| 2024/25 (Forecast) | 16.4 | 16.0 | 2.4 | 2.3 | 0.6 | 1.6 |
📌 Key Takeaways:
- Consumption continues to decline, while imports remain strong.
- Ethanol production remains stable, keeping sugarcane allocation uncertain.
- Stocks are slightly lower but still sufficient to cover EU demand.
🔍 Conclusion & Market Recommendations
📌 Key Takeaways:
✅ Global sugar prices continue to climb due to supply concerns, with ICE No. 5 futures up 0.86% – 1.40%.
✅ The EU sugar market remains firm, with prices rising to €0.56/kg FCA despite lower consumption.
✅ Weather risks and ethanol demand are shaping price trends.
✅ Stocks in the EU are shrinking, but imports are offsetting potential shortages.
📊 Market Strategy:
🔹 Buyers: Consider securing short-term contracts before prices rise further.
🔹 Sellers: Monitor global production trends and ethanol demand for potential price peaks.
🔹 Traders: Volatility is expected—use cautious short-term strategies.
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