Sugar Prices Drop Amid Global Surplus: Market Outlook & Forecast

Global sugar markets are experiencing a notable downtrend as recent FAO data highlights a continued fall in the food price index—now the third month in a row of declines—mirroring similar pressure in the sugar segment. Despite support from rising prices in grain and oilseeds, international sugar prices are sliding, partly due to ample supply and robust export flows from major producers. Recent observations confirm a price drop for granulated sugar across Europe, with offers currently as low as 0.43–0.48 EUR/kg FCA in key markets like Lithuania, the UK, Germany, and Central Europe, mostly at stable to slightly lower levels compared to the previous week. This shift comes amid strong production in Brazil and India, subdued import demand from China, and favorable weather aiding harvests in the EU and Black Sea regions. Adequate reserves and sluggish offtake are weighing on short-term sentiment, although logistical issues or droughts in some areas could suddenly shift this outlook. For traders and food processors, this presents new opportunities but also warrants a watchful eye on weather and macro trends.

📈 Prices

Location	Type	Delivery Terms	Price (EUR/kg)	Weekly Change	Market Sentiment
Lithuania (Mirijampole)	ICUMSA 45, 0.2–1.2 mm	FCA	0.48	0%	Stable
UK (Norfolk)	ICUMSA 32, 0.3–0.6 mm	FCA	0.46	0%	Weak
Germany (Berlin)	ICUMSA 45, 0.4–0.65 mm	FCA	0.48	0%	Stable
Czech Republic (Vyškov)	ICUMSA 45, 0.16–1.0 mm	FCA	0.43–0.46	-2%	Bearish
Ukraine (Vinnytsia)	ICUMSA 45, 0.4–1.0 mm	FCA	0.45	0%	Stable

🌍 Supply & Demand

• Production: Brazil’s sugar output for 2025/26 remains strong following bumper cane harvests, while India’s production is steady despite concerns over monsoon rains.
• Global Supply: EU and Ukraine factories are benefitting from moderate, timely precipitation resulting in good beet yields; refined sugar availability in Europe is ample.
• Demand: Import demand from China is muted, and global consumption growth remains limited due to health-conscious consumer trends.
• Inventories: Major producers are maintaining high stocks; FAO index and regional data point to adequate supplies in exporters like EU, Brazil, and India.

📊 Fundamentals & Drivers

• FAO’s food price index fell 1.2% in November, led by declines in sugar and dairy.
• Robust Brazilian crop and stable Indian output restrain prices; logistical disruptions in the Black Sea region and possible weather shifts require close monitoring.
• Speculative positions are neutral to mildly bearish following increased short selling as prices faded throughout Q4 2025.
• Recent stability in global freight and energy prices has not yet provided support to sugar values.

⛅ Weather Outlook

• Brazil: Favorable dryness over cane areas, accelerating harvest and crushing; above-average yields expected if conditions persist.
• India: Monsoon pattern was patchy, but key regions for 2025/26 harvest report sufficient irrigation; risk of late drought remains, but short-term impact is low.
• Europe: Moderate winter temperatures and rainfall are ideal for overwintering sugar beet areas (Germany, France, Poland, Ukraine).
• Black Sea: No major weather threats—cautiously optimistic for next season’s beet planting and early growth.

🌐 Global Production & Stock Comparison

Country/Region	2024/25 Output (mln t)	Stocks (mln t)	Export Capacity
Brazil	41.5	8.7	Very High
India	31.0	6.5	Moderate
EU	16.4	2.2	Moderate
Thailand	9.8	1.7	High
China	9.0	5.9	Low (importer)

⚡ Trading Outlook & Recommendations

• Spot prices likely to remain soft through the year-end, amid weak demand and high stocks.
• Buyers advised to secure near-term contracts, particularly in Central and Eastern Europe, where pricing is hovering at multi-month lows.
• Producers should monitor weather developments carefully—any turn toward drought or frost in Brazil/India could tighten the market swiftly.
• Speculators: Momentum and technicals are negative; best strategy may be to wait for bullish reversal signals or monitor for supply shocks.

📆 3-Day Price Forecast

Exchange/Location	Spot Price (EUR/kg)	1-Day	2-Day	3-Day
LT Mirijampole (EU FCA)	0.48	0.48	0.48	0.48
GB Norfolk (EU FCA)	0.46	0.46	0.45	0.45
CZ Vyškov (EU FCA)	0.45	0.45	0.45	0.44

Stability is expected unless a weather-related shock emerges; downside momentum persists in the near term.