The EU-UK market situation
Traditionally, most sugar in the EU+UK market is sold on one-year contracts negotiated between May and September. While this tradition is slowly changing, it remains an important period for sugar sales. This means that we are now in the period when most of the EU+UK鈥檚 2025/26 (Oct/Sep) sugar will be sold.
One month ago, the narrative was that dry conditions had allowed beet sowing to take place early, creating the potential for above-average yields. However, one month on, those same dry conditions are creating challenges for the crop.
In the UK, emergence and speed of growth has been very variable across the beet growing area. It is not just the UK where results are looking mixed; there are reports of non-emergence in parts of France while Poland has experienced a difficult spring due to a lack of rain and high incidence of pests. In other words, the risk around the new crop looks much greater than it did a few weeks ago.
At the same time, exports from the EU+UK to other countries remained strong up to the end of March, while imports were low, helping to improve the EU stock situation. 聽These factors should help processors who are looking to achieve higher prices to help improve their financial results. 2025/26 sugar is being offered at around 鈧�600/tonne, ex-works in Northwest EU.
For the moment, buyers on the continent remain cautious, pointing out that the cost of importing sugar into the EU is below this, in part, because of the stronger euro. Weather developments, along with news about plantings, which are still expected to be 6-9% down on last year across the EU+UK, will be important in determining the outcome of these negotiations. We will continue to keep you updated.
The world market situation
Last month, we reported how the macro-economic turmoil resulting from the imposition of tariffs in the US was affecting the sugar market.听
Since then, US President Donald Trump has softened his position and the situation has calmed down, at least, for the moment. Stock markets have been quietly recovering and the dollar has also regained some ground against the UK pound and the euro, but it remains weaker than before the tariff announcement.
Meanwhile No.11 world raw sugar prices have continued to trade in a range of 17.0-18.5 cents/lb, basis October, and show little sign of breaking too far out of that range in the short term.听
Prices below 18 cents/lb have created buying opportunities for importers, with China thought to have locked in a large volume of imports in recent weeks. However, the upside has been limited by Thailand (the world鈥檚 second largest exporter) still having the majority of its crop to price, along with expectations of improved global supply conditions in the second half of the year. These factors have kept the futures-linked beet price for October 2025 down in the region of 拢24/tonne at the time of writing.
Where we go from here? A huge amount rests on Brazil鈥檚 2025 harvest, which is in its infancy. Early results have been mixed. Up until the end of April, sugar production was around one million tonnes lower than at the same point last year due to less cane being crushed but also a lower sugar mix. Part of the reason for this was rainfall in the second half of April, which slowed the harvest. But there have also been reports of poor quality cane, with some of the cane being harvested in an immature state following very mixed weather over the cane development period.
The reality is that it too early to draw firm conclusions 鈥� only 34 million tonnes of cane has been crushed out of an expected 570-590 million tonnes. There remains a large range of expectations for sugar production, from 39.5-42.5 million tonnes (vs. 40.2 million tonnes in 2024/25). Where production falls within that range makes a huge difference to the market balance out to April 2026 and could make the difference between a very tight market and a comfortable supply situation. Add in uncertainty about the extent to which an improvement in production in India will result in more exports in 2025/26, and the outlook remains murky, keeping prices range bound pending further information. But below 17 cents/lb, there is potential for some Brazilian millers to switch away from sugar, which will continue to offer support.
A trader鈥檚 view
NFU Sugar Board appointee and sugar trader Paul Harper shares his thoughts on the current market situation.
NFU Sugar Board appointee Paul Harper
Paul has spent his entire career in commodities and has been in sugar since 1976. He joined C Czarnikow in 1973 working in their London, New York and Singapore offices. Paul has a huge amount of consultancy experience, having consulted for a hedge fund, major bank and a large trade house in sugar during that time.
Since our last review, sugar has been confined to a very narrow range.
For the time being, sub 17 cents in New York would appear too cheap, as producers are not following the market down to hedge and above 18 cents uncovers few buyers to accommodate the selling being done at this level.
Yesterday saw early crop reports from Centre/South Brazil which showed a significant decline from figures shown for the same period last year.
This caused a quick rally which, by the close, had seen the market close above the 18 cent/lb level for some time. It is very early in the crop, and sugar is likely to be maximised due to lower ethanol prices, over the crop period, but will almost certainly be the deciding factor for the price of sugar in the second half of the year.
Elsewhere, there has been little news and is largely the reason sugar has been confined to a narrow range. Dry weather in Northen Europe and particularly the UK is being monitored closely but as in Brazil, it is early days for the crop and things could change over time.
Ignoring the extremes of supply/production numbers for the coming year, the market would appear pretty balanced with the possibility of either a small surplus or small deficit being seen. If this remains the case, prices are likely to remain rangebound for a while.
April: Sugar resisted the global storm quite well
Taken from the World Association of Beet and Cane Growers鈥� Flashmarket newsletter on 30th April, by Timoth茅 Masson, Executive Secretary of WABCG and economist for the French beet growers association, CGB.
What a month! On 2 April, Trump's announcement of a 鈥渓iberation day鈥� caused a storm on markets. Oil returned to around $60/barrel, a level not seen for almost five years. Currency movements were very mixed: The Indian rupee and the Brazilian real fell sharply against the US dollar.
After this strong shock, the market reacted. Currencies returned to normal and, if we look only at the beginning and the end of the month, the pace is flat 鈥� except for the euro, which rose 5% against the US dollar.
In this context, the fall in sugar (-6% over the month) looks like quite a good performance.
This can be explained by the fact that speculators have not changed their views on the market. Everyone seems to be waiting for something to happen. And this could be next June, when the first robust results from the Brazilian crop (which opened this month) will be known... And indeed, the Brazilian situation will be really decisive: in the current campaign (according to S&P), 52% of the world's exports come from Brazil 鈥� a record high. The second largest exporter, Thailand, only accounts for 13%.
So all eyes are on Brazil. On 23 April, S&P published new figures; the analyst expects a disappointing harvest with 602 million tonnes of cane processed during the campaign, but with a record allocation to sugar (51.5%).
Despite this expected performance, S&P is forecasting a global deficit of -3.9 million tonnes for the current marketing year (Oct 24 鈥� Sep 25) and a further deficit of -1.5 million tonnes next year. Note that this is also due to a record diversion of sugar to ethanol in India: 5 million tonnes in 2025-26 鈥� a new record high for a country that almost did not divert sugar to ethanol five years ago.
The Beet Brief from NFU Sugar is prepared for UK sugar beet growers only. While every reasonable effort has been made to ensure the accuracy of the information and content provided in this document at the time of publishing, no representation is made as to its correctness or completeness. 皇家华人and the author do not accept liability arising from any inaccuracies, be they errors or omissions, contained within this document. This document is intended for general information only and nothing within it constitutes advice. It is strongly recommended that you seek independent professional advice before making any commercial decisions.