Sugar Market Softens – EU Prices Remain Stable as Demand Stays Weak

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“Sugar Market Softens – EU Prices Remain Stable as Demand Stays Weak”


Closing Prices on January 31, 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 519.50 477.94 -2.94 -0.62%
May 2025 502.10 461.93 -1.01 -0.22%
August 2025 484.70 446.72 -1.75 -0.39%
October 2025 477.80 439.58 -1.47 -0.33%
December 2025 477.50 439.30 -0.74 -0.17%
March 2026 481.80 443.26 -0.46 -0.10%
May 2026 484.00 445.28 -0.18 -0.04%
August 2026 485.20 446.38 -0.09 -0.02%
October 2026 484.10 445.37 -0.09 -0.02%
December 2026 484.50 445.74 -0.09 -0.02%
March 2027 486.00 447.12 -0.09 -0.02%
May 2027 483.40 444.73 -0.09 -0.02%
August 2027 483.20 444.54 -0.09 -0.02%
October 2027 482.50 443.90 -0.09 -0.02%

Market Analysis: Downward Correction After Recent Rally

After a period of strong price increases, sugar prices are softening, signalling possible market stabilization:

  1. Noticeable Declines in Short-Term Contracts:
    • The March 2025 contract dropped -0.62% to €477.94/t, showing its first significant decline after a strong upward movement in recent weeks.
    • The May 2025 contract also fell -0.22% to €461.93/t, indicating a cooling off in short-term demand.
  2. Minor Weakness Across All Contracts:
    • While long-term contracts saw only marginal losses (-0.02%), the consistent declines indicate that the bullish trend may be losing momentum.
    • The August 2025 and October 2025 contracts fell by -0.39% and -0.33%, reinforcing a softening pattern.
  3. Potential Reasons for the Market Pullback:
    • Traders may be profiting after the recent rally, causing a short-term decline.
    • Global supply concerns have not worsened, reducing pressure on buyers to rush into contracts.
    • Seasonal factors, such as preparations for Easter, might not yet exert full influence on the market.

EU Sugar Market: Stability Amid Weak Demand

  • The EU sugar market remains calm, with no price changes reported.
  • Prices remain between €0.50/kg and €0.54/kg FCA EU, with demand remaining weak.
  • The lack of movement in the EU market is likely due to large buyers already securing contracts, meaning there is no urgent purchasing activity.
  • Market participants estimate that around 30% of total sugar volumes remain uncovered, indicating that some buying activity is still expected in the coming months.

Market Outlook

📉 Short-Term:

  • The recent downward move suggests that prices might stabilize or decline slightly in the coming sessions.
  • However, supply chain disruptions or sudden demand surges could trigger another price increase.

📈 Long-Term:

Mintec Global
  • If global stocks remain steady and demand does not increase significantly, the market could enter a sideways trading phase.
  • The Easter buying season could still play a key role in shaping price movements in February and March.

🔍 Strategic Recommendations:

  • Buyers should remain cautious, as the market is currently experiencing a natural correction.
  • Producers should monitor global trends closely, as further price drops could impact profitability if not anticipated.

Conclusion

The sugar market is seeing its first meaningful decline after a strong upward rally, indicating potential price stabilization. While short-term contracts saw more noticeable drops, the broader market remains resilient.

In the EU, the market remains stable with no price changes. However, with 30% of sugar volumes still uncovered, some buying activity may return in the coming weeks. If global trends continue downward, EU prices could remain unchanged or even face downward pressure.

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