The European sugar market is experiencing a shift in contracting patterns this year, with deal closures occurring later compared to the traditionally active June-July period seen in previous years. The slower contracting pace reflects changed market dynamics as both market participants adjust their timing strategies.

Contracting activity lags behind historical patterns

According to our Sugar Analyst Gabrielle Del’Arco, sugar contract activity has been significantly slower in 2025 compared to previous years. While late June and July typically see the majority of annual deals closed, this year’s contracting pace has decelerated markedly.

The delay stems from elevated production levels in 2024, which created higher stock availability across the market. This surplus has contributed to a more neutral market outlook, with production expected to decline only slightly in the current cycle.

Price stability influences buyer behavior

European sugar prices have remained relatively flat, with South EU reaching €618/mt and West EU at €600/mt. This price stability has removed the urgency that typically drives rapid contract closures during peak season.

Raw sugar prices have also softened to 16.09 USc/lb, pressured by strong early-July output from Brazil’s Center-South region, where production jumped 15% year-over-year to 3.41 MMT.

Sellers hold back as buyers wait

The current market dynamic has created a standoff between buyers and sellers. With adequate stock levels providing buyers with flexibility, they are taking a wait-and-see approach rather than rushing into commitments.

Sellers, meanwhile, are holding back on negotiations, contributing to the slower contracting pace. This hesitation reflects the broader market uncertainty and the expectation that prices may continue their subdued trajectory.

Global supply pressures add complexity

Several factors are adding to the cautious market sentiment. Brazil’s sugar exports in July are on track to exceed June’s 3.3 MMT, with 3.2 MMT already shipped in the first 19 working days of the month.

Additionally, India may allow up to 2 MMT of sugar exports in 2025/26, supported by favorable monsoon conditions that are 4% above normal levels. This potential increase in global supply is adding further pressure to already subdued price momentum.

Market outlook remains subdued

The short-term outlook for EU sugar prices is stable to slightly bearish. Recent rainfall has provided some relief to crops, and despite downward yield revisions, production is expected to remain above average.

Rising duty-free imports from Brazil, Southern Africa, and Ukraine continue to add supply pressure. For 2026, limited contracting activity and postponed deliveries from Q4 2025 suggest buyers are anticipating further price declines.

With producer offers under pressure and adequate stock levels providing flexibility, the delayed contracting pattern may continue until market fundamentals provide clearer direction on future price movements.


This article is part of our sugar market analysis available here: https://app.vespertool.com/market-analysis/2164?q=&commodity=sugar