Double Shock Ahead – EU Sugar Faces Harvest Pressure, Ukraine Quotas, and Mercosur Imports

The European sugar market is heading into a period of unprecedented pressure. A very strong beet harvest is expected this autumn, with new campaign offers for Category 2 sugar already below €0.60/kg. From January 2026, Ukrainian imports at ~€0.38/kg FCA (~€0.45/kg DDP) will reset the EU price floor. On top of this, the Mercosur trade deal – potentially applied provisionally by end-2025 – adds ~374,000 t of additional raw sugar quotas. The result: producers’ hopes of achieving >€0.65/kg are unrealistic, while buyers are sitting back and waiting.

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📊 Current Market Snapshot (as of 8 Sept 2025)

• ICE White Sugar No.5 (Oct 25): USD 479.70/t (EUR ~436/t)
• ICE Raw Sugar No.11 (Oct 25): 15.63¢/lb
• EU Spot FCA Poland: quoted >€0.55/kg, but little demand
• DDP Germany: ~€0.63/kg, nominal only
• Retail Germany (Aldi/Lidl): €0.72/kg – below wholesale

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🌾 EU Beet Harvest Outlook 2025/26

• Excellent crop conditions across Europe.
• Producers face higher output and rising stocks.
• New campaign (Category 2) offers already <€0.60/kg FCA.
• Producer ambitions for >€0.65/kg seen as unrealistic.

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🇺🇦 Ukraine Effect (from Jan 2026)

• New EU quota opens in January.
• Current price in Ukraine: €0.38/kg FCA.
• Delivered into the EU: ~€0.45/kg DDP.
• Likely to reset the EU market floor significantly below current spot levels.

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🌎 Mercosur Agreement

• Political deal reached Dec 2024; provisional application possible late 2025.
• Sugar concessions:
  • 190,000 t duty-free.
  • 183,600 t at €98/t tariff.
• In relative terms small (<3% of imports), but psychologically significant, reinforcing the perception of oversupply.
• Adds additional bearish momentum at exactly the wrong time for EU producers.

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📉 Scenario Analysis – EU Sugar Price Outlook 2026

Scenario	Expected Price (€/kg)	Comment
EU Baseline (Strong Harvest)	0.60	Already below producers’ €0.65 ambition
With Ukraine Quota	0.45	Imports reset the market floor
With Ukraine + Mercosur	0.43	Additional pressure, buyers firmly in control

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🧭 Conclusion & Strategy

📉 Short-term (Q4 2025): Prices fall under harvest pressure, buyers refuse >€0.60/kg.
📉 Medium-term (2026): Ukraine imports reset the market floor to ~€0.45/kg; Mercosur adds symbolic and real pressure.
⚠️ Structural reality: EU producers’ pricing power erodes further; their wish for >€0.65/kg is no longer realistic.

📌 Recommendations:

• Buyers: Sit back and wait – significant downward correction likely from Q4 into 2026.
• Sellers: Secure early contracts before harvest glut and quota inflows; prepare for concessions.
• Traders: Watch for Q1 2026 – Ukraine quota + Mercosur could unleash a double shock, pushing EU sugar prices to multi-year lows.