Sugar Market Analysis: EU Balancing Act as Imports Stay High Amid Production Fluctuations

The European sugar market finds itself at the center of sustained volatility, with production swings and structural import requirements driving both price and policy debates. As Europe’s sugar output faces recurring shortfalls, imports, including those from Ukraine, play a crucial role in balancing supply and demand. Despite political controversy over the impact of Ukrainian sugar imports, data shows these flows only address a persistent supply gap rather than displace domestic production.

Recent years have seen EU sugar imports remaining substantial even as local output recovers, while market dynamics—such as revised quotas, international competition, and weather-driven yield risks—continue to shape both pricing and sentiment. This report dissects current price movements, explores underlying supply and demand mechanics, and offers a forward-looking perspective on both the market fundamentals and trading opportunities.

📈 Prices

Product	Origin	Location	Type	Latest Price (EUR/kg)	Prev. Price (EUR/kg)	Weekly Change (%)	Market Sentiment
Sugar granulated	GB	Norfolk	ICUMSA 32, 0.3-0.6mm	0.54	0.56	-3.6%	🔻 Cautiously Bearish
Sugar granulated	GB	Norfolk	ICUMSA 32, 0.45-0.6mm	0.55	0.57	-3.5%	🔻 Cautiously Bearish
Sugar granulated	GB	Norfolk	ICUMSA 45, 0.212-0.425mm	0.54	0.56	-3.6%	🔻 Cautiously Bearish

🌍 Supply & Demand

• EU output (MY 2022/23): Shortfall of 2 million tonnes; imports: 2.3 million tonnes
• EU output (MY 2023/24): Rebound by 1 million tonnes; imports: 1.4 million tonnes
• EU output (MY 2024/25): Improvements, but imports steady due to demand
• Ukraine’s Contribution: Over 1 million tonnes supplied in three years (out of 6.5 million tonnes total imports from third countries)
• Quota Update: New EU-Ukraine Free Trade Agreement set to raise Ukrainian sugar quota from 20k to 100k tonnes

📊 Fundamentals & Drivers

• Import Reliance: EU market structurally short, maintaining imports regardless of Ukrainian flows
• Global Competition: Brazil, India, and Thailand remain key exporters; local price pressure from larger global harvests
• Speculative Positioning: Funds turning neutral-to-short on ICE Sugar due to renewed supply optimism globally
• Policy Dimension: Import politics heated by ongoing trade negotiations and protectionist calls from local producers

☁️ Weather Outlook & Yield Risks

• EU: Wetter spring in France and Germany has aided beet development, but localized flooding has delayed some planting in the east. Mild summer forecast supports continued recovery in yields if disease pressure remains low.
• Ukraine: Mixed rain and sun, some late planting delays but no major drought risk; harvest potential average to slightly above average.
• Brazil: Mostly favorable; above-normal harvest boosting global supplies, further pressing world prices lower.

🌐 Production & Stock Comparison

Country	2023/24 Output (mln t)	2023/24 Imports (mln t)	Stocks (mln t)
EU	15.4	1.4	2.1
Brazil	42.0	0 (net exporter)	6.0
India	33.5	0 (limited exports)	6.5
Ukraine	1.5	0.01	0.2

💡 Trading Outlook & Recommendations

• Short-term price action remains soft due to strong Brazilian harvest and EU production recovery.
• EU import demand to persist despite quota reforms; spot prices could stabilize as new quotas are implemented and local demand recovers post-summer.
• Traders: Consider short positions or hedges until technical indicators confirm bottoming; watch for harvest/weather surprises, especially in Brazil and the EU.
• Processors & Buyers: Secure Q4 2025 supply on dips; be vigilant on policy signals from Brussels as quota renewals may drive volatility.
• Monitor updated EU-Ukraine trade details as higher quotas may shift intra-EU flows temporarily.

📆 3-Day Regional Price Forecast (FCA, EUR/kg)

Date	Norfolk (GB)	Vyškov (CZ)	Berlin (DE)
Day 1	0.54	0.52	0.65
Day 2	0.54	0.52	0.65
Day 3	0.54	0.52	0.65