Global market prices continue to decline, Europe expects another beet area reduction

Global Sugar Market

World market prices fall through ethanol parity on talks of higher C/S Brazil output 

Commodity markets experienced another volatile month as macroeconomic uncertainty and shifting fundamentals in key producing regions weighed on sentiment. Strengthening crop prospects in Brazil’s Centre-South (C/S) region, combined with favourable weather across the Northern Hemisphere and signs of reduced cane allocation to ethanol in India, have pushed world sugar prices below the ethanol parity threshold of 15 c/lb. 

Raw sugar closed last week in the 14–15 cts/lbs range, as bearish fundamentals dominated trading activity. Sugar futures have struggled to find support amid strong production data from C/S Brazil and limited speculative positioning updates due to the ongoing lack of data releases following the US government shutdown. Since the last report, market behaviour suggests that speculative short positions have grown further, adding to the downward pressure on prices. 

Brazil: Rainfall across the Centre-South has picked up in recent weeks — a development supportive for next season’s cane growth, yet potentially disruptive for the remainder of this season’s harvest. Increased rain could slow the pace of exports and reduce cane quality toward the tail end of the crush.  

India: Recently, New Delhi shared a lower-than-expected ethanol allocation from sucrose-based feedstock. This implies that more sugar will be available for export, though the low world price environment is likely to discourage Indian millers from offering. The question now is whether the global prices need to rise, or if Indian domestic prices must fall to unlock exports. 

• Bullish: Sudden end to the cane crop season and reduced appetite for exports from India due to low world market prices 

• Bearish: Stronger-than-expected C/S Brazil output and improved weather outlook. Low Indian ethanol allocation from sucrose could allow for additional exportable sugar. 

European sugar market 

EU beet campaign runs smoothly as beet area reductions are expected for next spring 

Europe’s 2025 beet campaign is progressing smoothly, supported by favourable late-season weather conditions. Despite an overall beet area reduction of around 9%, yield performance has improved across most major producing regions. According to the latest JRC MARS crop report, EU beet yields are now estimated at 76.3 tonnes per hectare — slightly higher than the 75.7 tonnes achieved in 2024.  

Harvesting is advancing well across multiple member states. Germany continues to report strong yields following an extended growing season, supported by mild temperatures and timely precipitation. The Netherlands, Belgium, and the UK are all on track for robust campaigns. In Sweden, yields are close to the five-year average, despite calls for reduced contracted beet areas in the Nordics for next season. 

Meanwhile, the European Commission has fast-tracked access for Ukrainian sugar. The country will be allowed to export 46.000 tonnes of sugar to the EU until the end of December, followed by an annual quota of 100.000 tonnes in 2026.  

On the domestic front, political and logistical challenges are also emerging. In Spain, growers have voiced frustration over Azucarera’s announcement to cease beet processing at Jerez from 2026, potentially igniting farmer protests in the coming months. Despite such localized tensions, overall crop progress remains positive.  

Looking ahead, early projections indicate that beet area could reduce by a further 5% next spring. Assuming average yields, this would translate into a potential drop of over one million tonnes in EU sugar production compared to this season. 

• Bullish: Expected 5% reduction in 2026 beet area may lower EU sugar output by over 1 million tonnes. 

• Bearish: Strong EU beet yields offset area losses and pressure domestic prices while favourable weather conditions extend the growing season across key regions 

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