EU Sugar Prices on Shaky Ground – Will a Strong Harvest Burst the Price Bubble?

EU Sugar Prices on Shaky Ground – Will a Strong Harvest Burst the Price Bubble?

ICE White Sugar No.5 futures continued their upward trend on Monday, with the October 2025 contract rising 0.76% to USD 474.90/t (EUR 434.12/t). In the EU, spot prices above €0.60/kg are still prompting forward contracting, but market observers warn: warehouses are full, weather conditions have been very good so far, and a strong EU sugar beet harvest is expected in September/October. Coupled with a controversial pricing policy — heavily discounted, long-term deals for major buyers like Coca-Cola, Pepsi, and Nestlé — producers may struggle to keep current high prices once demand slows.

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📊 ICE Sugar No.5 – Futures Closing Summary (11.08.2025)

Contract	Close (USD/t)	Change (%)	Close (EUR/t)
Oct 25	474.90	+0.76%	434.12
Dec 25	468.40	+0.88%	428.44
Mar 26	472.40	+0.85%	431.75
May 26	473.10	+0.76%	432.39
Aug 26	472.80	+0.59%	432.12
Dec 26	477.40	+0.36%	436.54

(Exchange rate: 1 USD = 0.914 EUR – ECB reference 11.08.2025)

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🇪🇺 EU Spot Market – Firm but Vulnerable

• FCA Poland: above €0.60/kg, unchanged.
• DDP Germany: around €0.70/kg, stable.
• Buyers are still locking in Q4/Q1 2026 volumes, but urgency has slowed compared to early August.
• Full warehouses and an expected strong harvest raise the likelihood of price concessions if forward buying slows.
• Pricing criticism: The practice of offering preferential pricing to major multinationals forces SMEs to pay higher rates, resulting in growing dissatisfaction in the mid-tier market.

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🛍️ Updated Retail Sugar Prices (1 kg, August 2025)

Country	Retailer	Price (€/kg)
Germany	Aldi / Lidl	0.72
Poland	Biedronka	0.42
Austria	BILLA	1.49
France	Carrefour	~0.85
Belgium	Aldi MOUNTAIN®	0.75
Netherlands	Albert Heijn	~0.75
Switzerland	Aldi	1.39
Hungary	Aldi	~0.90

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🌍 Market Drivers

• 📈 Technical buying and short covering support futures.
• 📦 EU producers hold large inventories, giving a safety buffer for supply.
• 🌱 Harvest outlook for September–October is strong, thanks to favourable growing conditions.
• 🇧🇷 Brazil’s Centre-South crush remains strong — fundamentals are not supply-tight.
• ⚠️ EU spot prices are driven by pricing strategies and buyer structure, not actual scarcity.

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🌦️ Weather Outlook

• EU: Good rainfall distribution and favourable temperatures — strong yield potential.
• Brazil: Dry conditions are aiding harvest, but some soil moisture deficits remain in parts of São Paulo.
• India: Monsoon on track — crop development stable.
• Thailand: Normal growing season.

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📊 Price Comparison Table

Market	Price (EUR/kg)	Comment
ICE Futures (Oct)	0.434	Rebound continues – still below spot levels
EU Spot FCA (PL)	>0.60	Firm – supported by forward contracting
DDP Germany	0.67	Stable – but vulnerable to demand slowdown
Retail Germany	0.89	Recently reduced from >€1
Retail Belgium	0.75	Aldi MOUNTAIN® price

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📉 Inventory & Harvest Pressure Chart

Below is a visualisation combining current EU stock levels and expected new harvest volumes, showing why analysts believe current spot prices may be unsustainable:

EU Sugar Supply Outlook (2025/26)

Inventory (Current)    ████████████████████  ~ High (Full warehouses)
Expected Harvest Sep/Oct ████████████████     ~ Above average yields
Demand Trend (Q4)      ███████               ~ Stable to slightly lower

Legend:
█ = Relative supply magnitude

The combination of high starting stocks + above-average harvest = potential supply surplus in Q4, which could lead to downward price adjustments unless demand picks up.

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🧭 Conclusion & Strategy

📈 Short-term: Futures momentum remains positive.
📦 Medium-term: Strong harvest + high inventories could trigger spot price corrections in Q4.
⚠️ Structural risk: Pricing model favouring big clients creates competitive imbalance and market frustration.

📌 Recommendations:

• Buyers:
  → Secure only essential volumes at current highs; monitor harvest progress closely.
  → Negotiate for flexible delivery and price review clauses.
• Sellers:
  → Capitalise on current firmness to secure forward sales above €0.70/kg.
  → Prepare contingency plans for rapid discounting if demand slows post-harvest.
• Traders:
  → Watch resistance at USD 478–480/t; support around USD 468.
  → Monitor EU harvest data releases for potential turning points.