World market situation
Last month, we reported that world sugar prices were finding support from dry weather in Brazil and disappointing cane crops in Asia. This remains the case:
- In Brazil, March remained hot and dry. There has been some improvement in April, but the consensus for the cane crop has been coming down and is now probably below 600 million tonnes, with some estimates substantially lower.
- Results in Asia, where 2024/25 cane harvests are coming to an end, have been below expectations even compared to when we wrote our last update one month ago.
Despite these constructive developments, the No.11 world raw sugar price has come under pressure, with October 2025 futures falling from over 19 cents/lb to around the 18 cents/lb mark.
Sugar has suffered from the macro-economic fallout from the uncertainty created by Trump鈥檚 tariffs. There have been two developments that have had a negative impact:
- The price of oil has fallen. This raises the possibility that fuel prices in Brazil will fall, which lowers the price at which Brazil is willing to produce sugar for the world market (Brazilian cane millers have flexibility in the production of sugar and biofuel).
- Sterling has appreciated against the dollar, which lowers the price expressed in pounds.
These factors have pushed the futures-linked beet price for October 2025 down to around 拢24-25/tonne at the time of writing.
With so much macro instability, it is hard to give a view on future direction, with the decisions of one man having a huge impact on market sentiment. From a sugar perspective, the market still looks set to move into a period of better supply when Brazil鈥檚 harvest gets going in May. Moreover, the absence of a strong weather pattern (La Nina or El Nino) points to the likelihood of better crop development this year.
However, we still see world raw sugar prices spending most of their time in a range of 17.0 鈥� 19.5 cents/lb. A recovery will need the macro situation to stabilise and/or for Brazilian crop estimates to fall further as the harvest gets going.
The EU-UK market situation
Dry weather across Northwest Europe and Poland has meant that beet has been drilled much earlier than in the past two years. England and Wales experienced the driest March in the past 60 years.聽
The low soil moisture, particularly in Poland, remains a concern, but the arrival of some, albeit limited, rainfall in Northwest Europe has been welcome for farmers. Based on discussions at the recent Geneva Sugar Conference, the consensus is for EU+UK beet area to drop by between 6 鈥� 9%.
EU sugar prices reported by the European Commission continue to fall in February to 鈧�540/tonne, reflecting low prices agreed for the 2024/25 crop year. However, the spot prices are rising and are now markedly higher than this. Prices have been helped by strong exports and weak imports to date, which are helping to reduce stocks.
Early sales for 2025/26 are reported to be in the region of 鈧�550-600/tonne, ex-works beet belt. The pricing round for 2025/26 sugar is now starting in earnest. Processors are looking for prices above this initial range, while buyers are pointing to the stronger euro/weaker dollar resulting from the current macro instability, which is lowering the cost of imports at the moment.
If we take a conservative view and assume prices are at the lower end of the 鈧�550-600/tonne range, taking into account a premium for sales in the UK market, it might translate approximately into a beet price under the market-linked bonus scheme for 2025/26 of around 拢32/tonne.
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.
Sugar, like many other commodities, has shown little resistance to the economic turndown caused by the tariff war currently raging between the USA and the rest of the world.
20 cents in the nearby May position proved too much of a barrier on the upside and with speculators once again building short positions into the decline, prices have fallen more than $50 in pretty much a straight line.
Fundamentally, not a great deal has changed with the Centre/South Brazil crop still likely to be the deciding factor as to where the market moves next. With the market at lower levels and a weaker US dollar, it is possible that an increase in demand will be seen.
The market would still appear to be rangebound between 17 and 20 cents/lb. A break to the downside however could accelerate speculative selling which would require strong physical demand to arrest the decline.
The beet price on the futures-linked market has fallen considerably and currently sits at 拢24 鈥� 25 suffering from a weaker US dollar in addition to the fall in sugar values.