For the Quarter Ending December 2024
North America
In the final quarter of 2024, sugar markets in North America saw varied trends, shaped by seasonal demand, weather conditions, and production costs. In December, U.S. sugar prices stabilized after earlier increases, supported by moderate retail demand and sufficient inventories. The USDA revised the U.S. sugar ending stocks-to-use ratio upward to 13.5%, signaling a stable supply outlook. While domestic beet sugar production was lower, strong imports from Mexico and Brazil helped balance the market.
Meanwhile, Brazil faced significant production challenges due to El Niño-induced droughts, which severely impacted sugarcane yields and raised global supply concerns. Rising NPK fertilizer costs, especially from U.S. exports, added to the pressure on production expenses, further pushing up sugar prices. On the global stage, the FAO Sugar Price Index reflected a 6.7% annual increase, driven by tight supplies from key exporting countries, although monthly prices showed signs of moderation.
This contrast between stable North American markets and production difficulties in Brazil highlights the complex relationship between climate factors, economic conditions, and seasonal demand that continue to influence the sugar industry.
Asia-Pacific
Asian sugar prices in Q4 2024 exhibited stability with mild declines due to a mix of production challenges with India being the most impacted region, subdued retail demand, and fluctuating input costs. Adverse weather conditions, including unseasonal rains and record-high November temperatures, reduced sugarcane yields in key states like Uttar Pradesh, where production for the first quarter of the 2024-25 marketing year fell to 3.28 million tonnes, down from 3.43 million tonnes a year earlier. The Indian Sugar and Bioenergy Manufacturers' Association (ISMA) forecasted a 2.24% decline in annual sugar production, while robust food processing sector demand offset weaker retail consumption driven by inflationary pressures in the FMCG sector. On the global front, tight supply concerns emerged due to adverse weather in Brazil and India’s increased diversion of sugarcane for ethanol production. However, lower input costs from stable NPK fertilizer prices and the steady pace of sugarcane crushing helped maintain sufficient market supply, balancing domestic demand amidst a challenging economic and climatic environment.
Europe
In Q4 of 2024, sugar prices in the European market saw a significant surge, continuing the upward trajectory from the previous months. The main drivers of this price increase were disruptions in supply, particularly a shortage of domestically produced sugar. The European Parliament’s proposed revisions to deforestation regulations created uncertainty, as these changes could restrict sugar imports from key regions if not resolved before the upcoming deadline, further tightening supply. Additionally, logistical challenges, including congestion at the Hamburg port due to modernization efforts and delays caused by disruptions in the Red Sea, exacerbated the situation. These factors strained the flow of sugar into Europe, especially in Germany, leading to higher prices. Despite steady demand from the domestic food and beverage sector, the compounded supply-side issues pushed prices past 22 cents per pound, a near two-week high. On the weather front, north-western Europe experienced autumn warmth, with above-average temperatures due to an amplified jet stream, which had a temporary positive effect on agricultural conditions. While sugarcane is not grown in Europe due to unfavorable climate, sugar beets, the primary source of sugar, were harvested between September and November. The crushing period that followed further influenced the seasonal dynamics of sugar supply. However, rising production costs, linked to fertilizers and logistical constraints, contributed to the ongoing upward pressure on prices. With regulatory uncertainties and supply disruptions still in play, further volatility in sugar prices is expected in the near term.
South America
In Q4 of 2024, Brazilian sugar prices saw notable fluctuations, driven primarily by supply-side disruptions. A severe drought and extreme heat earlier in the year, particularly in São Paulo, led to devastating effects on sugarcane plantations, causing a significant reduction in yields. Approximately 80,000 hectares were affected by fires, exacerbating the supply shortage. Despite these challenges, Brazil managed to achieve a record sugar export volume of 38.24 million tons in 2024, underscoring its continued dominance as a global sugar exporter. This surge in exports, coupled with strong international demand, helped maintain upward pressure on domestic prices. However, adverse weather conditions persisted, with ongoing droughts exacerbated by the El Niño phenomenon, contributing to further agricultural and water resource stress. Meanwhile, fluctuations in the prices of NPK fertilizers added to the production cost pressures, impacting overall sugar prices. Despite these hurdles, Brazil's sugar exports remained robust, balancing the tightening domestic supply. As a result, sugar prices in Brazil remained elevated, reflecting both local production challenges and a strong global demand for Brazilian sugar.
For the Quarter Ending September 2024
North America
The North American sugar market experienced a downturn throughout the third quarter of 2024, predominantly driven by sluggish demand for sugar. Insights from various market participants indicate that consumers in North America are increasingly prioritizing health and wellness, resulting in a strong focus on reducing sugar intake. In August World Agricultural Supply and Demand Estimates (WASDE) indicated that the U.S. sugar supply for the 2023/24 period was revised upward by 20,000 short tons, raw value (STRV), bringing the total to 14.702 million STRV. This increase is attributed to larger imports and an uptick in Florida cane sugar production, which offset lower production levels of beet sugar. However, a slight shortage was observed in September 2024, highlighting ongoing challenges within the market.
Poor sugarcane yields in key exporting countries, such as Brazil and Mexico, due to adverse weather conditions, are expected to reduce export volumes, thereby limiting sugar availability in North America. As a result, this supply constraint may lead to a price surge in the upcoming quarter, as market dynamics shift in response to changing availability and consumer preferences.
As per ChemAnalyst, the latest quarter-ending price of White Sugar CFR Texas was hovering at USD 815/MT.
Asia
The Asian sugar market exhibited mixed trends during the third quarter of 2024, with China being the most significantly impacted region. Prices declined during the initial two months of the quarter; however, they surged considerably in the final month. Raw sugar imports were notably low from March to June, but there was a marked increase in July, with imports reaching 398,000 tonnes. During the period from January to July 2024, China’s raw sugar imports totaled 1.57 million tonnes, with 1.13 million tonnes imported in the month of July alone. Despite this uptick in imports, demand in the Chinese market has remained modest throughout the quarter. By the end of August, a total of 8.86 million tonnes of sugar had been sold across the country, reflecting a 9.6% year-on-year increase. This rise in sales underscores the consistent demand for sugar in the domestic market, suggesting that while import volumes may fluctuate, the overall consumption trends remain stable. The latest quarter ending price of Raw Sugar CFR Shanghai was hovering at USD 556/MT.
Europe
During the third quarter of 2024, the German sugar market experienced a notable decline in prices, influenced by several seasonal and environmental factors. The holiday season in August typically leads to fluctuations in consumer demand, as many individuals travel or take vacations, resulting in decreased purchasing activity for sugar-related products. This seasonal decline in demand contributed to the overall downward trend in prices. Additionally, storms that impacted the region during this quarter further complicated market dynamics. Adverse weather conditions disrupted agricultural activities, affecting the supply chain and creating uncertainty regarding crop yields. However, despite these disruptions, the overall supply of sugar remained stable. This stability, combined with reduced demand, intensified the downward pricing trend. Looking ahead, it is anticipated that sugar production in Germany is expected to rise to 16.6 million tonnes in the 2024/25 season. This projected increase in production may influence future pricing and market dynamics, particularly as the market adjusts to the evolving balance between supply and demand. Stakeholders will need to closely monitor these developments as they navigate the challenges and opportunities in the sugar market. The latest quarter ending price of Sugar FD Hamburg was 876/MT.
South America
The South American sugar market experienced a significant surge throughout the third quarter of 2024, with Brazil being the most impacted region. This price increase can be attributed primarily to a considerable decline in sugar production due to adverse weather conditions, which have severely affected the previous crop and raised concerns about potential reductions in the current harvest. The country has been grappling with challenging weather patterns, including droughts in various areas, exacerbated by the effects of El Niño. In 2024, Brazil faced extreme weather events, notably an increase in heat waves across multiple regions. While the full extent of the damage caused by recent fire outbreaks on sugarcane production is still being assessed, officials believe that these fires are unlikely to have a significant impact on Brazil's total sugar output for the 2024-25 marketing year. In the second half of August, sugar production in Brazil’s key Centre-South region was reported at only 3.26 million metric tonnes, reflecting a 6% decline compared to the same period in the previous year. This production downturn has been further exacerbated by the recent fires in the country’s sugarcane fields, leading to additional supply disruptions and contributing to the sharp increase in sugar prices. Preliminary estimates from two of Brazil's largest sugar and ethanol producers indicate substantial damages to crops, particularly in the country’s top-producing state. These supply constraints, coupled with rising demand from certain regions in the Asia-Pacific (APAC) and North America, have placed further upward pressure on prices, intensifying concerns regarding sugar availability in the upcoming months. As per ChemAnalyst, the latest quarter ending price of Sugar FOB Santos was 485/MT.
