For the sugar price trend in 2025, the industry generally agrees that the gradual increase in supply remains the biggest unfavourable factor, thus making sugar prices continue to be pressured downwards. However, there is still the possibility of phased volatility during this period due to low preexisting inventories, changes in production increase expectations, and the impact of import and export policies. In addition, the lower cost of sugar imports may also lead to an increase in domestic forward white sugar imports.
Supply eases and demand falls
With the growing supply gap in the sugar market, domestic and international sugar prices have risen, both hitting their highest levels in recent years. However, with the recovery of domestic and international sugar supply and the easing of the supply-demand balance, this will be the fundamental factor causing sugar prices to fall back in shock. Analysts believe that the increase in domestic and foreign sugar production has created a loose supply in the market and a narrowing of the gap between supply and demand, which has put pressure on the overall sugar prices.
China Sugar Industry Association data show that as of the end of December 2024, 2024/25 sugar production period of the country a total of 4.434 million tonnes of sugar, an increase of 37.82% year-on-year; the country's cumulative sales of 2.4994 million tonnes of sugar, an increase of 47.18% year-on-year; cumulative sales of sugar rate accelerated by 3.61 percentage points year-on-year. In December, monthly industrial stocks of sugar 1.904 million tonnes, at the second highest level in the same period in history; industrial stocks increased by 1.1451 million tonnes compared with November, the speed of accumulation is fast.
And from the international market, after the International Sugar Organisation (ISO) will be 2024/25 season global sugar supply shortfall forecast from 3.58 million tonnes down to 2.51 million tonnes. Especially in the Brazilian market, the Brazilian Sugar Industry Association (UNICA) data show that Brazil's production in the 2024/25 season was stable at about 40 million tonnes, more than the average sugar production of the same period in the last six seasons. Brazil exported 38.238 million tonnes of sugar and molasses in 2024, the highest since 2012, up 9.01% year-on-year, according to export data released by the Brazilian Secretariat of Foreign Trade (Secex).
In 2023/24, domestic sugar production has risen and imports are expected to materialise in the second half of the year, making domestic sugar supply more plentiful, but downstream demand growth has not been as good as expected. Analysts from the Ministry of Agriculture and Rural Development's Market Early Warning Expert Committee, who are also analysing the supply and demand situation in January 2025, believe that the abundant market supply due to the large number of new domestic sugar launches, coupled with the approaching end of the Chinese New Year, has led to a weak shock in the domestic market. Internationally, precipitation in Brazil brought favourable news for sugarcane planting, and sugar supply tightened as India and Thailand entered peak sugar production, leading to a softening of global sugar prices.
Compared with the gradual increase in supply pressure, sugar demand in 2025 or can only maintain a steady small increase in the state, and the medium and long term is facing downward pressure, which also led to the demand side of the sugar price support is limited. The United States Department of Agriculture (USDA) said in a report, nearly 10 years China's sugar consumption remained at 14.8 million tonnes to 15.8 million tonnes range, is expected to 2024/25 China's sugar consumption of 15.6 million tonnes, an increase of only 100,000 tonnes over the previous year.
Stage support factors remain
Despite the increasing supply pressure, but the decline in sugar prices in 2025 or also not ‘smooth’ annual carryover stocks are low, changes in production expectations and uncertain weather, or is expected to bring stage support to sugar prices.
Firstly, from the perspective of carry-over stocks, during the rally of sugar prices in September 2024, low stocks became one of the important supporting factors. Secondly, there is also uncertainty over the outlook for increased production in the new crushing season. Internationally renowned sugar merchant Wilmar International (Wilmar) recently released news that the company has lowered its estimate of sugar production for the 2024/25 season in India, the world's second-largest sugar producer, from 32.5 million tonnes to 30.8 million tonnes, triggering market concerns.
Finally, changes in export and import policies could also constitute a trigger for a phase of rebound in sugar prices. ‘India's estimated production does have variables, but the overall is still in the stage of increasing production, the biggest impact lies in the amount available for export and the final export policy.’It is worth noting that the import and export policy will not only affect the volatility of sugar prices, but may also cause the strength of domestic and foreign sugar prices to diverge.
Data from the General Administration of Customs showed that China imported a total of 3,961,700 tonnes of sugar from January to November 2024, an increase of 485,900 tonnes year-on-year, and is expected to import 4.2 million tonnes of sugar for the whole year, an increase of 200,000 tonnes year-on-year. In addition to sugar, molasses and other sugar-containing substitutes have also become an important part of China's imported sugar sources. Data from the General Administration of Customs showed that China's imports of syrups as well as solid mixtures totalled 2,186,200 tonnes in January-November 2024, a record high.
In the Tariff Adjustment Programme 2025, which has been implemented since January 1, 2025, the MFN duty rate for sugarcane syrup or beet syrup solutions containing flavourings or colouring agents, and syrups containing more than 50% sucrose, has been significantly increased from 12% to 20%. Although in the industry's view, this adjustment does not involve imported syrup and premixed powder ‘main force’, but still may bring additional support to the domestic sugar market.
Source:CCM
More information can be found at CCM Dairy Sugar&sweeteners China Monthly Report.
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