Concerns surrounding cane sugar production, particularly in Brazil, have caused futures prices in New York and London to rise this month. In the US, they even reached their highest level since May.
A price level of $16,94 per pound for sugar contract No. 11 (raw sugar) on the New York Stock Exchange on August 12th was the highest price since May 30th. That level has since fallen slightly, but raw sugar prices have remained above the $16 level since July. The London white sugar exchange has broadly followed this trend. There too, the price rose, reaching $489,40 per ton on August 14th, the highest price in a month.
Less Brazilian production
Good harvest expectations for cane sugar in Brazil and India, the world's two largest producers, caused the sugar market to become depressed earlier this year. Concerns have now arisen, particularly regarding Brazil. A harvest volume of 2025 million tons is expected for the current 26-39 growing season, compared to 41 million tons previously. Drought is the main culprit. The country's existing stocks have shrunk from 10,1 to 9,3 million tons.
Furthermore, analysts and traders consider global sugar demand to be healthy. Pakistan has stockpiled significantly, and India is still closely monitoring its sugar exports. Exports are expected to cease on October 1st, with the new season not scheduled to begin until February next year.
EU beet cultivation shrinks
News from Europe about sugar beets has little to no effect on global pricing. The European sugar sector is still not in a positive position. Five factories in the EU are closing their doors this year. The acreage has shrunk, which is improving the balance between production and demand. According to figures from the European Commission, this represents a 10,6% reduction in sugar beets, representing 1,352 million hectares compared to 1,512 million in 2024. This is the smallest area since 2022. Despite grain being a less attractive financial alternative, arable farmers have given sugar beets even less of a chance. The reduction in acreage is also the result of smaller contract volumes. The European growers' organization CIBE expects a smaller reduction of 7,5%.
In the July forecast of the Mars report, the JRC assumes an average of 74,8 tons of beets per hectare will be harvested from European fields. This is 2% less than expected in June, but 2% above the five-year average. Drought and problems with leafhoppers in Germany have caused yields to be adjusted downwards. A third of all German beet crops have been affected by SBR and RTD. In France, the yellows virus is once again wreaking havoc in all growing regions.
Campaign starts September 8
Cosun announced the start of the beet campaign in Hoogkerk and Dinteloord on September 8th. Despite a 5% reduction in acreage, the cooperative expects to process more beets due to a higher yield per hectare compared to 2024. The total is expected to reach 7,65 million tons.
British sugar beet processor British Sugar is already offering a glimpse into the coming season. On August 15, it announced the contract prices for the 2026 harvest year. These are £30 per tonne (guaranteed up to 65% of the total delivered volume). This equates to €34,79. This represents a decrease of £3 to £6 compared to the current season. According to British Sugar director Keith Packer, a price reduction is inevitable due to the current state of the sugar market. NFU Sugar, the association representing sugar beet growers, says it is satisfied with the price.
Lower prices
What's hurting European sugar products is the strong euro against the dollar. Last month, it even reached its highest level since September 2021, making EU products even more expensive for buyers. Conversely, the Brazilian real has actually fallen in value. In May, the average European sales price was €540 per tonne. That's the lowest level in more than two years.