The global sugar market experienced divergent pricing trends in January 2025, influenced by varying supply conditions, weather patterns, and economic uncertainties across key producing regions.

In Thailand, sugar prices saw a notable decline in January, marking a stark contrast to the trend observed in the previous month. According to Mr. Poonpong Naiyanapakorn, Director of the Office of Trade Policy and Strategy (OTPS), the Producer Price Index (PPI) for Thailand stood at 111.1 points, reflecting a modest 0.7% year-on-year increase. While agricultural prices rose 2.0%, driven by higher demand for rubber and industrial pineapple, sugarcane prices weakened due to a high price base from last year and increased production this season. The FAO Food Price Index also declined to 124.9 points in January, down from 127.0 in December, driven by a sharp reduction in sugar and vegetable oil prices. Increased export competition, economic uncertainties in key markets, and currency volatility further pressured Thai sugar prices, reinforcing a bearish market outlook.

Similarly, In Brazil, sugar prices experienced a significant decline, reversing the previous month's upward trend. This drop was mainly driven by improved global supply conditions, supported by favorable weather patterns in major sugar-producing regions. Heavy rainfall over the past four months has enhanced sugarcane yields, boosting overall sugar production. Additionally, India’s decision to resume sugar exports has further contributed to increased global supply availability, exerting downward pressure on prices.

In contrast to Thailand and Brazil, India’s sugar prices surged in January 2025, following a stagnant period. This price increase was primarily driven by a shortage of domestically produced sugar due to adverse weather conditions affecting sugarcane crops. Over three dozen sugar mills in major sugar-producing states closed nearly two months ahead of schedule, citing cane supply shortages.

Market participants indicate that India’s sugar production is projected to decline by 12% year-on-year in the 2025 season, further tightening domestic supply. Despite the government authorizing 1 million metric tons of exports, mills are struggling to secure export contracts due to high premium demands over London prices, which international buyers are unwilling to pay. Further, India recorded the third warmest January since 1901, with unseasonably high temperatures and erratic rainfall affecting sugarcane yields in key states like Tamil Nadu. These weather anomalies have raised concerns over reduced yield and quality, impacting both regional production and market stability.

According to ChemAnalyst, sugar prices are expected to rise in the coming months, driven by a combination of factors. Climate variability will remain a key concern, as unpredictable weather patterns could impact sugarcane yields in major producing regions. Additionally, trade policies, including export restrictions and tariffs, may influence global supply dynamics. Demand trends, particularly from key consumer markets, will further shape price trajectories. As supply constraints persist in some regions while production improves in others, the global sugar market is likely to experience continued volatility, with price movements reflecting the delicate balance between supply, demand, and external economic factors.