Sweet but Shifting: 2025 Sugar Market Analysis Faces Asia’s Demand Surge and Brazil’s Output Flexibility

The global sugar market is navigating a period of notable transition. With projections from the OECD-FAO pointing towards a moderate decline in international sugar prices over the 2025–2034 horizon, the industry is bracing for a cocktail of influences that could swing supply and demand. Among the leading market influencers is Brazil, the world’s top sugar exporter, whose dual ethanol-sugar production system allows rapid switching between products depending on relative profitability. This unique capability positions Brazil at the driver’s seat of global pricing. But it’s not alone: India and Thailand follow closely in export leadership, while India’s ambitious ethanol blending program is already reshaping its domestic market and tightening global sugar availability.

Demand growth is heavily concentrated in Asia, set to account for over half of global consumption by 2034 as population and income gains drive steady increases. Contrastingly, developed countries are curbing their sugar intake, citing health and dietary preferences, which tempers demand growth globally. Adding to the complexity, unpredictable weather events and shifting trade policies, especially India’s export controls, threaten to disrupt supply chains. The year ahead will test the resilience and agility of producers, exporters, and market participants alike as they navigate weather risks and evolving trade flows in an increasingly Asia-centric sugar market.

📈 Prices

Product	Origin	Location	Price (EUR/kg)	Weekly Change	Sentiment
Sugar granulated ICUMSA 32, 0.3-0.6mm	GB	Norfolk	0.56	0.00	Neutral
Sugar granulated ICUMSA 45, 0.212-0.425mm	GB	Norfolk	0.56	0.00	Neutral
Sugar granulated ICUMSA 45, 0.2-1.2mm	LT	Mirijampole	0.56	+0.02	Bullish
Sugar granulated ICUMSA 45, 0.4-1.0mm	UA	Vinnytsia	0.58	0.00	Neutral
Sugar granulated ICUMSA 45, 0.4-1.0mm	UA	Vyškov	0.54	0.00	Neutral
Sugar granulated ICUMSA 45, 0.5-0.75mm	CZ	Vyškov	0.57	+0.01	Stable
Sugar granulated ICUMSA 45, 0.16-0.8mm	CZ	Vyškov	0.57	+0.01	Stable
Sugar granulated ICUMSA 45, 0.4-0.65mm	DE	Berlin	0.69	+0.02	Bullish

🌍 Supply & Demand

• Brazil dominates exports, capitalizing on its capacity to switch between sugar and ethanol. Policy changes, weather events (e.g., frost, drought), and currency movements remain major supply-side variables.
• India is emerging as both a major consumer and exporter (8% global share) but is strategically reducing export share due to a surge in ethanol blending, targeting 22% of sugar-directed output by 2034.
• Thailand stays a top-three exporter, maintaining influence over Asian trade flows.
• Global demand is set to rise, driven by Asia (India, China as prime consumers), urbanization, and rising income levels. Conversely, high-income countries are expected to decrease consumption due to health awareness initiatives.

📊 Fundamentals

• OECD-FAO Outlook: Price projections for 2025–2034 suggest mild declines due to surplus flexibility, mainly from South America, and shifts in downstream usage towards ethanol.
• Inventory: STOCK-TO-USE ratios remain comfortable but could tighten if India curbs output further due to drought or policy constraints.
• Speculative Positioning: Managed money is relatively neutral, with funds – after a period of heavy long liquidation – showing little appetite to re-enter aggressively.
• Recent Developments: Some European and Lithuanian spot prices show a slight uptick, signaling potential local supply tightness, though most markets currently remain stable.

🌦 Weather Outlook

• Brazil: Forecasts show a return to normal rainfall after a dry spell, aiding cane harvests and raising 2025/26 production estimates. Risk of late-season drought persists.
• India: Mixed monsoon signals; key growing regions report near-normal precipitation but face short-term heatwaves, possibly capping output.
• Thailand: Wet season begins with favorable irrigation, supporting yields. However, any delay in rains could stress output.

Overall, weather in top producers is slightly supportive in the near term, but volatility remains high.

🌎 Global Production & Stock Comparison

Country	2024/25 Production (Mt)	2024/25 Exports (Mt)	2024/25 Stocks (Mt)
Brazil	40.5	29.5	7.2
India	32.3	6.8	10.4
Thailand	11.0	8.5	2.1
EU	15.1	2.0	4.4
China	10.1	0.1	5.6

📆 Trading Outlook & Recommendations

• Monitor Brazil’s weather: any return to dry conditions could disrupt harvesting and spur rallies.
• Watch Indian government policy – further export curbs or unexpected ethanol blending mandates will tighten global supply.
• Asian demand growth, especially from evolving dietary and income trends, remains a durable market pillar.
• Hold neutral to slightly bullish positions for European-origin sugars given local supply signals.
• Consider end-user coverage for Q3–Q4 if spot prices remain stable and weather risks persist.
• Speculators should exercise caution – funds appear hesitant, signaling continued consolidation rather than breakout movement for now.

🔮 3-Day Regional Price Forecast

Location	Current Price (EUR/kg)	3-Day Forecast (EUR/kg)	Direction
Norfolk, GB	0.56	0.56	Stable
Berlin, DE	0.69	0.70	Up
Vyškov, CZ	0.54-0.57	0.55-0.58	Slight Up
Mirijampole, LT	0.55-0.56	0.56-0.57	Slight Up