Sugar Market Sinks to 5-Year Low: Oversupply Drives Further Retreat

The global sugar market is facing one of its most intense downturns in recent years. Raw sugar prices have tumbled to a five-year low, plummeting by more than 30% compared to last year. This dramatic decline is largely due to a considerable global supply glut, driven by record harvests and robust production in key countries. Major producers like Brazil and India have flooded the market with sugar, and Europe is also grappling with high stocks following better-than-expected beet crops in Germany, Poland, Belgium, and France. Even a 10% reduction in European sugar beet acreage in 2025 wasn’t enough to offset the oversupply, a situation exacerbated by continued imports from Ukraine and elsewhere.

Leading European processor Südzucker has taken unprecedented steps, urging farmers to voluntarily scale back planting for the next season, sweetening the deal with a EUR 10 per tonne compensation for reduced beet deliveries. Despite stable granulated sugar prices (around 0.46–0.48 EUR/kg FCA), the tone in the market is strongly bearish, and land-switching among European growers now looks imminent for 2026 as sugar loses ground to alternative crops with steadier pricing prospects. With the International Sugar Organization projecting a 1.63 million tonne global surplus for 2025/26, only significant further cuts in planting or a sharp pick-up in demand can reverse the bearish momentum. The coming months will test the resilience and adaptation skills of farmers and processors across Europe and beyond.

📈 Prices: Current Sugar Market Overview

Product	Type	Origin	Location	Price (EUR/kg)	Weekly Change	Sentiment
Sugar granulated	ICUMSA 32, 0.300–0.600 mm	GB	Norfolk (GB)	0.46	0.00%	Bearish
Sugar granulated	ICUMSA 32, 0.450–0.600 mm	GB	Norfolk (GB)	0.46	0.00%	Bearish
Sugar granulated	ICUMSA 45, 0.212–0.425 mm	GB	Norfolk (GB)	0.46	0.00%	Bearish
Sugar granulated	ICUMSA 45, 0.4–1.0 mm	UA	Vinnytsia (UA)	0.45	0.00%	Bearish
Sugar granulated	ICUMSA 45, 0.4–1.0 mm	UA	Vyškov (CZ)	0.45	0.00%	Bearish
Sugar granulated	ICUMSA 45, 0.4–0.65 mm	DE	Berlin (DE)	0.48	0.00%	Bearish

🌍 Supply & Demand Drivers

• Oversupply overwhelms market: Surplus stocks after strong beet harvests in Germany, France, Poland, and Belgium.
• Global production at record levels: Brazil ramps up output, India expected to keep flooding the world market.
• EU imports rising: Ukrainian sugar enters the EU, boosting pressure on local prices.
• ISO Projection: 1.63 million tonne global sugar surplus for 2025/26.
• Industry response: Südzucker offers compensation to farmers for reduced beet planting; voluntary cuts now incentivized.

📊 Fundamentals: Production, Stocks & Trade

Country	2025/26 Production Estimate (mln tonnes)	2025/26 Stock Change (mln tonnes)	Comment
Brazil	~44	↑	Record output, largest exporter
India	~35	↑	High production, exports add to glut
EU	~16	↔	Solid beet campaign despite acreage cut
Ukraine	~1.5	↑	Exports intensify EU price pressure
World	185–190*	+1.63*	*ISO forecast, global surplus

🌦️ Weather & Crop Outlook

• Europe: Recent weather conducive to record beet yields—ample rainfall and moderate temperatures improved root development, crop stress minimal.
• Brazil: Rainfall remains supportive across the Center-South, boosting cane yields. No major adverse weather reported.
• India: Monsoon was normal; no significant threats, further supporting high output outlook.

Impact: No signs of weather-induced stress likely mean continued high beet and cane yields globally for early 2026 delivery, unless an unseasonal pattern emerges soon.

📆 Outlook & Strategy

• Market tone is firmly bearish: global and European prices expected to remain under pressure through Q1 2026.
• Acreage reduction incentives may limit further declines, but oversupply dominates.
• For producers: Consider voluntary acreage reduction in response to Südzucker’s premium; assess alternative crops for 2026.
• For buyers/traders: Wait for further price easing or spot opportunities if planning bulk purchases.
• Speculative positioning: Short bias remains favored until signs of significant supply cutbacks or weather disruption emerge.

3-Day Regional Price Forecast (Spot FCA)

Location	Current Price (EUR/kg)	3-Day Forecast
Norfolk (GB)	0.46	0.45–0.46
Vyškov (CZ)	0.45	0.44–0.45
Berlin (DE)	0.48	0.47–0.48