Sugar Prices Keep Rising For Various Reasons

14th April 2025

Sugar prices are increasing due to a combination of factors, primarily related to supply constraints and strong global demand.

Adverse weather conditions, including droughts and frost, have significantly impacted sugar cane and beet production in major exporting countries like India, Thailand, and Europe. This reduced production has led to tighter global supplies, driving prices higher.

Adverse Weather:
Droughts and frost have damaged sugar cane and beet crops, particularly in major producing regions like India and Thailand, leading to reduced yields and lower overall sugar production.

El Niño:
The El Niño weather pattern has also contributed to drier conditions in key sugar-producing areas, further impacting production.

Reduced Beet Planting:
In some EU countries, farmers are projected to reduce the area they plant with sugar beets due to lower profitability, further tightening supply.

Global Demand:
Despite these supply issues, global demand for sugar remains strong, especially in developing countries with growing populations and increasing disposable incomes.

Production Costs:
Producers are also facing rising production costs, including expensive fertilizers and energy bills, which adds to the overall price of sugar.

UK Policy on Neonicotinoids:
The UK government's decision to ban neonicotinoids in 2025 has posed significant challenges for growers, particularly in combating virus yellows—a disease that neonicotinoids have traditionally helped manage. Without access to these treatments, farmers are reconsidering sugar beet cultivation, which could lead to reduced supply and further price increases.

EU Imports:
The EU is taking steps to secure cane sugar imports from developing countries by granting duty-free access to the market, aiming to ensure continued supplies.