Softs
Sugar
Sugar
Price movements (monthly)
ICE Sugar #11 Futures Prices
Month-on-month Change
Year-on-year Change
The convoluted macro-economic backdrop fueled concerns over a global economic recession and weakening demand. As a result, May 2025 ICE #11 raw sugar futures declined sharply in April, bottoming at US$ 17.51 cents/lb (on April 15). Following suit, the second-month contract (July 25 ICE #11) settled -4.3% lower month on month (m-o-m) at US$ 17.85 cents/lb ($393.52 pmt, as of March 24). Consequently, the May-Jul 2025 calendar spread decreased sharply to a 7-point premium.
The August 25 ICE #5 (London) white sugar contract ended -5.7% down m-o-m to $504.5 pmt, for a “white premium” (refiners’ margin) of $109.43 pmt (Aug/May basis).
Sugar
Other price drivers
↓ Energy Prices
The Brent crude oil price decreased by 11.8% month on month in April to $66.12/barrel (as on 23rd April 2025). In response to the announcement of US trade wars adding to the risk of a global economic recession, the international energy market trended lower this month. However, a possible agreement between the US and China brought some relief to the market by month end (but failed to drive a full price recovery).
→ Changes to ECB strategy
The European Central Bank is pondering changes to its monetary-policy strategy in a bid to cope with the convoluted backdrop and potential price shocks. ECB members will discuss the matter in the beginning of May, when they are to conduct their first in-depth debate on an ongoing review of their strategy. Although the details remain unclear, ECB President Christine Lagarde´s statement indicates a more forgiving stance: “[…] while the ECB’s determination to hit its 2% target is uncontested, it may have to accept that always delivering price growth at this level is impossible in the kind of environment we are facing now.”
↓ Skepticism about US-China trade deal
Investors remain wary about the potential US-China trade agreement after Chinese officials stated that Beijing will not engage in talks of a trade deal with the US until Washington lowers tariffs on China. As a result, the US Dollar was under pressure throughout April. The Expana dollar index was 99.44 on 25th April 2025, down by 1.6% mom.
Sugar
Market sentiment for the month ahead
A neutral-to-slightly-negative sentiment for world sugar prices prevails. This view hinges on the prospect of increasing demand versus a strong start to the new C/S Brazil crop
Market participants eagerly await the results of the May 25 ICE NY #11 raw sugar futures expiry (30th April). It will be interesting to see whether market participants have had a change of heart, switching sides from deliverer to receiver (and vice-versa).
Looking forward, the forecast of favorable weather conditions in Asia during the monsoon season adds to the view of adequate supply from Thailand and India (subject to Government of India approval)
↑ Prevailing low prices should encourage demand
Based on world sugar prices at below the US$ 17.00 cents/lb level, import margins for major destination markets are open (especially in China). In fact, there are indications that Chinese importers have bought some cargoes for May/June shipment during the recent market dip – similar to the pattern observed in February.
“When considering that China was targeting US$ 17.00-18.00 cents/lb, it is no surprise to see importers resuming demand now. As prices remain low, we expect this to increase.” - Broker
“In spite of the above-normal rainfall in April (especially at the end of the month), there still concerns about sugarcane development in C/S Brazil. This will be written-off only when the first empirical data becomes available.” - Analyst
↓ Speculators adopting risk-averse stance
At the end of January, the net short speculative position of the ICE #11 raw sugar futures stood at 139,873 lots (equivalent to 7.1m metric tonnes). In the months that followed, funds materially decreased this position, which stabilized at a more neutral position of 45,670 lots as on April 15 (2.3m metric tonnes). This pattern of investors adopting a cautious approach regarding risk assets can be attributed to uncertainties surrounding the convoluted macro-economic backdrop. As a result, world sugar prices remained rangebound at US$ 17.00-18.00 cents/lb. As the US trade war eases and the view of a tight world sugar market fades with the onset of the new C/S Brazil season, we flag the risk of speculators resuming their strategy of shorting the market.
↓ Risk of lower support for world sugar prices
Amid falling international energy prices, there is growing pressure from the Brazilian Government on Petrobras to decrease gasoline prices. In the event of this scenario, hydrous ethanol prices are likely to decrease to remain competitive at the pumps, leading to lower hard support for world sugar prices.
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