[ad_1]
The global sugar market is experiencing a bearish trend, compounded by an increase in supply, leading to declining prices across Europe throughout 2024.
Traders are forecasting a global sugar surplus for next year, extending into 2026, largely influenced by current crop conditions, resulting in a decline in market sentiment.
The sugar beet harvest in the UK has returned to typical levels following a diminished yield last year.
For additional information, click here: Tate & Lyle Sugars acquisition of competitor approved by CMA.
Associated British Foods, which oversees British Sugar, observed a more significant drop in sugar prices in the UK and Europe than anticipated, attributed to increased market supply.
George Weston, CEO of Associated British Foods, remarked, “While sugar profitability this year surpasses that of FY23 [2023 Fiscal Year], it has fallen short of our earlier projections.”
This situation arises from a notable decline in European sugar prices, which are expected to affect profitability for sugar in the 2025 financial year before a recovery is anticipated in 2026.
Domestic sugar beet prices are significantly impacted by global sugar trends, and a growing surplus may influence trade dynamics for an extended period.
According to Paul Harper, an appointee on the NFU Sugar board and sugar trader, “Brazil continues to be the primary supplier, and while crop conditions are reasonably stable, it is unlikely they will replicate last year’s export levels.”
He added, “The total sugar production will largely depend on the crop’s performance as the season progresses. Although India is not exporting any sugar at present market prices, it could become a potential supplier if the market improves significantly.”
“Unless there are any changes, it seems the market will continue to operate within recent ranges. As the European harvest begins and Brazil transitions into the latter half of its crop year, any unexpected production figures could dictate the market’s next steps.”
UK Sugar Contracts
This year, NFU Sugar and British Sugar agreed on a fixed price of £33 per ton for the 2025-26 sugar beet crop.
However, a fraction of this contract will comprise either a futures-linked price or a base price of £30.70 per ton, along with a market-linked bonus.
Arthur Marshall, NFU Sugar’s commercial and market insight manager, stated, “Up to 70% of the contract tonnage can be assigned to the £33 per ton fixed price. However, it is also feasible to allocate a smaller fraction to the fixed price and more than 30% to the other pricing options.”
Mr. Marshall also noted that European sugar prices are currently estimated to be around €480-€525 per ton (£405-£442 per ton) for the 2024-25 season, a drop from €570 per ton (£480 per ton) noted earlier this summer.
SOURCE
Maria Sanchez completed her Bachelor’s degree in Plant Sciences from the University of California, Davis, in the USA. Her studies focused on plant genetics and biotechnology, with an emphasis on developing disease-resistant crop varieties. Maria has contributed to several research projects aimed at improving crop resilience to climate change and is now pursuing her Master’s degree in Plant Breeding.
