Sugar Market Stays Sweet: Steady Prices, Strong Stocks, and a Favorable Monsoon Lift Outlook

The global sugar market is demonstrating remarkable stability despite ongoing production challenges and evolving policy landscapes in top-producing countries. As India—the world’s second-largest sugar producer—prepares to wrap up the 2024–25 season with substantial closing stocks, market confidence remains high for the transition into the 2025–26 period. According to the National Federation of Cooperative Sugar Factories (NFCSF), India’s year-end sugar reserves are anticipated to reach 4.87 million tonnes, providing a strong buffer for meeting early 2025–26 demand and easing concerns over price volatility.

The government’s dynamic regulation of domestic quotas and prudent export allowances have effectively balanced supplies, keeping ex-mill prices between USD 46.56 and USD 47.04 per quintal. Meanwhile, a newly increased sugarcane fair and remunerative price (FRP) and robust ethanol demand are incentivizing cane growers and millers, fostering both supply growth and market resilience. As international attention turns to the impact of the Indian monsoon and ongoing ethanol diversification, market participants are watching weather patterns, ethanol policy, and speculative flows for short-term trading cues. Europe and the CIS region see steady, if modest, price adjustments at origin, while the global trade complex anticipates India’s production rebound and evolving ethanol strategies. The months ahead are set to offer fresh opportunities for both producers and buyers in a market underpinned by solid fundamentals and careful policy navigation.

📈 Prices

Exchange/Origin	Grade/Type	Location	Price (EUR/kg)	Previous Price	Update Date	Sentiment
Vyškov, CZ	ICUMSA 45, 0.16-0.8mm	FCA	0.57	0.55	2025-06-03	Firm/Bullish
Mirijampole, LT	ICUMSA 45, 0.2-1.2mm (99.7% purity)	FCA	0.53	0.53	2025-06-02	Stable
Norfolk, GB	ICUMSA 32, 0.3-0.6mm	FCA	0.56	0.56	2025-05-27	Stable
Vinnytsia, UA	ICUMSA 45, 0.4-1.0mm	FCA	0.58	0.58	2025-05-27	Firm
Berlin, DE	ICUMSA 45, 0.4-0.65mm	FCA	0.66	0.66	2025-05-27	Firm

🌍 Supply & Demand

• India is set to close the 2024–25 season with a stock of 4.87 million tonnes, enough to meet early 2025–26 domestic demand. Projected 2025–26 production: 35 million tonnes (up from 2024–25).
• 2024–25 season production (as of April 30): 28.69 million tonnes, with 3 million tonnes diverted to ethanol.
• Government policies (export limits, quota controls) are ensuring price stability in face of strong domestic consumption and limited export supply.
• Exporters: With Brazil as the top supplier and India’s limited exports, the global market remains tight but stable. European origin prices remain steady amid restrained global trading volumes.

📊 Fundamentals & Market Drivers

• Policy: India’s central government increased the FRP of sugarcane by USD 0.18/quintal, now USD 4.26/quintal for 2025–26.
• Ethanol Diversion: 3 million tonnes of sugar output channeled into ethanol as part of India’s biofuel blending program; NFCSF calls for further ethanol procurement price hikes and blending targets to 2035.
• Weather: Early monsoon advances are reported favorable in Maharashtra and Karnataka, raising prospects of output recovery in 2025–26.
• Speculative Positioning: Managed money/hedge funds are moderate net long, with most participants cautious pending confirmation of monsoon progress and Indian government export policy for 2025–26.

🌤️ Weather Outlook

• Southwest monsoon onset in India has been timely, with above-average rainfall in Maharashtra and Karnataka supporting early cane growth and boosting planting intentions.
• Forecast for next 2 weeks: Normal to slightly above-normal precipitation expected in India’s cane belt; supportive for replanted and ratoon cane stages.
• Brazil’s center-south region: Dry weather persists but not yet critical; harvest progressing on track, though any further dryness could lower sugar content in coming weeks.

🌏 Global Production, Stocks, and Cross-Country Comparisons

Country	2024–25 Output (Mt)	2025–26 Forecast (Mt)	End Stocks (Mt)	Status
India	28.7	35.0	4.87	Rebound Expected
Brazil	42.0	42.2	9.3	Stable/Rising
EU	16.6	16.8	1.5	Stable
Thailand	8.5	10.0	0.8	Recovering
China	9.2	9.1	2.0	Stable
Global Total	~185	~192	40–42	Moderate Surplus

📆 Trading Outlook & Recommendations

• Short-term (next 2–3 weeks):
  • Prices likely to remain stable-to-firm as India wraps up the season with ample stocks and favorable planting outlook.
  • Monitor monsoon developments and Indian government ethanol/diversion policy signals.
  • End-users should consider forward purchases, particularly if weather turns less favorable in Brazil or South Asia.
• Medium-term (Q3–Q4 2025):
  • Watch for confirmation of India’s monsoon strength and 2025–26 cane sowing area expansion.
  • Export policy changes and ethanol price reforms in India may lead to adjustments in global supply expectations.
  • Speculators: Cautious stance warranted. Buy on dips if weather or policy uncertainty increases.

🔮 3-Day Regional Price Forecast (Key Exchanges)

Region/Origin	Short-term Forecast
Central Europe (CZ, DE)	Stable to slight firming (0.56–0.58 EUR/kg)
Baltic (LT)	Stable (0.53–0.54 EUR/kg)
Western Europe (GB)	Stable (0.56 EUR/kg)
CIS (UA)	Stable to firm (0.54–0.58 EUR/kg)