Sugar
Sugar
Price movements (monthly)
ICE #11 raw sugar futures
Month-on-month Change
Year-on-year Change
- After touching 4-year lows, world sugar prices recovered post the July 25 ICE #11 raw sugar expiry, moving back to the USc 16.00-17.00/lb range. The front-month ICE #11 raw sugar futures settled 7.2% higher than at the end of June at 16.59 USc/lb (as on July 29).
- The second-month contract (March 26 ICE #11) posted a smaller mom increase, 1.5% higher as of the time of publication at 17.19 USc/lb. Consequently, the Oct 25-Mar 26 calendar spread stood at a 60-point discount.
- The October 25 ICE #5 (London) white sugar contract ended 0.5% higher mom at $475/mt, resulting in a “white premium” (refiners’ margin) of $109.55/mt (Oct/Oct basis).
Sugar
Price drivers
↑ USD/BRL
The USD/BRL exchange rate scenario remains uncertain. A 50% US import tariff regime on goods imported from Brazil is set to take effect on 1st of August, which has led to political tensions between both countries and volatility of the Brazilian currency.
It is worth mentioning that the USD/BRL exchange rate has a significant impact on the sugar-ethanol price parity in Brazil. Strengthening of the BRL can lead to higher ethanol prices in sugar equivalent, and vice-versa.
→ Energy Prices
In the week ending July 25, crude oil prices dropped 1.2% w-o-w to $68.44/barrel following concerns about the economy outlook in US and China and its impact on demand.
On July 30th, prices marked 5-week highs and reached $72.50/barrel after US President Donald Trump gave Russia a tight deadline to end the conflict with Ukraine.
Sugar
Price forecast
Global raw cane sugar prices are hovering near 4-year lows amid prospects for an oversupplied market. So far, India and Thailand have benefitted from abundant rainfall, and the general view is that the two countries will see a bumper crop for the 2025/2026 marketing year. The most recent UNICA data for Center-South Brazil, the country’s key sugar-growing region, shows disappointing sucrose content; however, a record-high sugar mix is expected to make up for the poor cane quality. The harvest was delayed by excessive rainfall in April and June, but cane crushing performance was strong in the first two weeks of July, and overall, the production outlook for Brazil is positive. According to USDA projections for the 2025/26 marketing year, the supply surplus will swell from 3% to 6.4% of world demand, leaving little room for a significant recovery in the global sugar market any time soon. Our macroeconomic analysis based on the PMI is pointing to a downturn in the economy, and this is also likely to weigh on sugar prices.
At the same time, the price reached technically oversold territory earlier in the summer, meaning the price cannot fall much lower. Non-commercial traders are currently holding a large net short speculative position in the Sugar #11 futures contract, meaning they have a hugh potential to move the market higher if sentiment shifts.
All things considered, this sets the sugar market up for a period of sideways trading. Barring any major supply shocks in the key growing regions of Brazil, India, and Thailand, global benchmarks such as the Sugar #11 futures price may continue to trade in a relatively tight range for the foreseeable future. Extreme weather events could disrupt this view; however, ENSO neutral conditions are expected to prevail, at least, until November 2025, reducing the risk of extreme weather. Still, the risk of
unfavourable weather conditions and lower-than-expected yields remains on our radar. We are also monitoring for shocks to the global crude oil market and changes in the BRL/USD exchange rate, which influence how much sugar is produced and exported to the world market.
Technical buying may cause a temporary rally, but as long as the market remains well-supplied, it will likely be short-lived. At the same time, low prices encourage buying from large consumer markets, creating a floor for global prices. We expect this to lead to an overall sideways market, a view only likely to be disrupted if harvests end up disappointing in the three major producer countries.
Sugar
Supply and demand: India, Thailand, Brazil, EU, UK, China, Mexico
Sugar
Market sentiment (for the month ahead)
Mildly Bearish
Market players note the ample supply in the global plastics market, which can more than cater to sluggish demand. Sources do not expect these dynamics to change imminently.
↓ Increasing Supply
Despite the poor demand environment, production levels remain robust globally. The ample availability comes against the backdrop of production outages at certain facilities in the US. Sources noted that international trade between the US and the EU may increase in the coming months following the signing of a trade deal between the two economies, with EU exports of plastics capped at a 15% tariff.
→ Muted Demand
According to market sources, consumer demand is not showing any signs of rising, even during the seasonally higher summertime, when the use of plastic bottles tends to increase. Additionally, longer-term orders are sluggish due to many players being out for the summer holidays. Participants reported that this lack of demand is especially visible in the LDPE, HDPE, and PP markets.
→ Mixed Production Costs
Like last month, production costs remain mixed. Ethylene prices trended strongly upward throughout July to cater for demand from the LDPE and HDPE segments. However, the propylene market remains depressed on tepid demand.
↑ US Weather-Related Concerns
In the US, market sources are increasingly concerned about the prospect of weather-related production outages due to the hurricane season. So far, players have reported a quiet season with little damage but remain vigilant of any future storms.
Trusted by industry leaders
About Expana
Expana is the world's largest IOSCO-certified commodity price reporting database.
With 34,000+ verified commodity prices and 1,500 price forecasts across agrifood and industrial markets, you can enhance price visibility throughout your supply chain, reduce costs, lower COGS, and mitigate risk.
Brands by Expana: Mintec Analytics, Urner Barry, Feed Info, Stratégie Grains, Tropical Research Services
Disclaimer
Any forward-looking statements are the views and expectations of the individual market participants. Expana does not have a forward-looking view within this report or associated content. To the extent legally permissible, Expana shall not be liable and disclaims and excludes any and all liability (whether direct or indirect), nor shall Expana be liable in contract, tort (including negligence), misrepresentation (whether innocent or negligent), restitution or otherwise. No information (whether written, electronic or oral) made available herein constitutes or is to be taken as constituting or the giving of investment or financial advice by Expana, or any of its affiliates or their employees to any person, organisation or entity. Any use or reliance on the information and any suggestions, insights or guidance made against such content is entirely at your own risk.
For details on the methodology used to assess the Expana Benchmark Prices, visit this link.