Sugar Market Shows Mixed Signals – Short-Term Gains, Long-Term Uncertainty
Closing Prices on January 28, 2025 (ICE Sugar No. 5) Converted to EUR
Using a USD/EUR exchange rate of 0.92, the latest closing prices for ICE Sugar No. 5 in EUR are as follows:
| Contract | Closing Price (USD/t) | Closing Price (EUR/t) | Change (EUR) | % Change |
|---|---|---|---|---|
| March 2025 | 511.50 | 470.58 | +4.14 | +0.88% |
| May 2025 | 499.80 | 459.82 | +1.84 | +0.40% |
| August 2025 | 484.50 | 445.74 | +0.37 | +0.08% |
| October 2025 | 477.30 | 439.12 | -2.21 | -0.50% |
| December 2025 | 474.00 | 436.08 | -6.07 | -1.39% |
| March 2026 | 476.70 | 438.56 | -5.61 | -1.28% |
| May 2026 | 478.90 | 440.59 | -4.88 | -1.11% |
| August 2026 | 480.50 | 442.06 | -4.60 | -1.04% |
| October 2026 | 479.80 | 441.42 | -4.60 | -1.04% |
| December 2026 | 480.60 | 442.15 | -4.60 | -1.04% |
| March 2027 | 482.10 | 443.53 | -4.60 | -1.04% |
| May 2027 | 479.50 | 441.14 | -4.60 | -1.04% |
| August 2027 | 479.30 | 440.96 | -4.60 | -1.04% |
| October 2027 | 478.60 | 440.31 | -4.60 | -1.04% |
Market Analysis: Volatility as Short-Term Gains Clash with Long-Term Weakness
The sugar market is experiencing mixed price movements, reflecting both short-term optimism and longer-term caution:
- Short-Term Gains:
- The March 2025 contract rose by +0.88% to €470.58/t, continuing a recent upward trend in short-term contracts.
- The May 2025 contract also saw a modest increase of +0.40%, reaching €459.82/t.
- Declining Longer-Term Contracts:
- Contracts from October 2025 onward showed declines of approximately -1.04%, suggesting that longer-term market expectations remain cautious.
- The December 2025 contract fell to €436.08/t, marking the largest single-day drop of -1.39%.
- Key Market Factors:
- Uncertainty surrounding supply chain logistics is keeping short-term demand elevated.
- Weakness in long-term contracts suggests that traders anticipate a potential correction in prices once seasonal demand fades.
EU Sugar Market Situation
- Prices in the EU remain between €0.50/kg and €0.54/kg FCA, with demand still sluggish.
- The gap between global and EU prices persists, but the strengthening global market may eventually push European prices higher.
- Retail pricing inconsistencies remain an issue, with some large buyers securing significantly lower prices than smaller market participants.
Market Outlook
📈 Short-Term:
- The continued rise in short-term contracts indicates buyers securing supply before further increases.
- Easter demand could push prices even higher in the coming weeks.
📉 Long-Term:
- The market remains cautious about sustainability, as long-term contracts are showing weakness.
- If demand slows after peak seasonal purchasing, price correction could follow.
🔍 Strategic Recommendation:
- Buyers should act quickly if they anticipate further short-term price increases.
- Producers should prepare for potential volatility in the year’s second half as market conditions shift.
Conclusion
The sugar market remains volatile, with short-term prices continuing to rise, while long-term contracts indicate caution. While EU prices remain stable for now, the global market’s movements could soon lead to price adjustments in Europe. Market participants should closely watch developments and act accordingly.
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