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Since taking office, the President of the United States (US) has consistently imposed reciprocal tariffs on imports from third countries, citing the lack of tariff harmonization and a trade disparity where other nations benefit from selling products in the US market. In response, the Brazilian Minister of Mines and Energy highlighted the US' 81.16% tariff on Brazilian sugar without offering reciprocal concessions. Additionally, the trade balance between the US and Brazil has remained positive for the US. In 2023, the US exported USD 43.05 billion (EUR 39.9 billion) to Brazil, while Brazil's exports to the US amounted to USD 37 billion, with crude oil being Brazil's primary export and refined oil as the US's main export to Brazil.
El Salvador's sugar export revenue has increased by USD 28 million, marking an 18.4% over the past five years, despite a 20% decline in export volume from 8.7 million quintals in 2023 to 7 million quintals in 2024. The average price rose from USD 21.10/quintal to USD 25.60/quintal, reflecting a USD 4.50 increase. However, official statistics indicate a drop in export volume, with a reduction of 2.5 million quintals compared to 2020. Sugar remains a key export, totaling USD 179.5 million in 2024, though this is lower than USD 184.6 million in 2023. Sugarcane production is growing in El Salvador, with a 31% increase in cultivated area from 2002 to 2023, and the 2024/25 harvest is expected to yield 752,000 metric tons (mt) of sugar.
India's sugar production fell 14% year-on-year (YoY) to 21.98 million metric tons (mmt) between October 1 and February 28, 2025, driven by lower output in key producing states Maharashtra and Karnataka, according to the Indian Sugar and Bioenergy Manufacturers Association (ISMA). The decline led to an early shutdown of 177 sugar mills, compared to 49 mills during the same period last year.
The Prime Minister of Pakistan chaired a high-level meeting to review sugar supply and price control, emphasizing the government's commitment to ensuring affordability. He highlighted recent measures against sugar smuggling and directed authorities to take strict action against hoarding and illegal stockpiling. The Prime Minister instructed federal and provincial governments to collaborate on price stability, particularly during Ramadan and stressed that negligence in price control would not be tolerated. Officials reported sufficient sugar stocks and the establishment of fair-price shops. In addition, the Prime Minister reaffirmed the government’s resolve to end smuggling and maintain steady supply through strict enforcement measures.
Spanish sugar beet sowing is expected to decline in 2025 due to low yields and a significant drop in sugar prices, which have fallen by 40% to 50% over the past year. This downturn has discouraged beet producers, leading to a slowdown in the area sown compared to the previous season's increase. Concentrated in regions such as Castilla and León, Spain's sugar beet production yielded 3.71 mmt in 2024, reflecting a 32.4% rise in the summer harvest. However, with prices dropping to USD 519.06/mt (EUR 481/mt) in Jan-25 and challenges such as phytosanitary product bans, farmers are concerned about future profitability. The sector also faces potential impacts from European Union (EU) agreements with Mercosur and Ukraine's EU accession negotiations, which could increase competition for local producers due to cheaper imported sugar.
In W9, Brazil's sugar prices recently decreased to USD 0.48 per kilogram (kg), reflecting a 4% weekly decline and a 17.24% YoY drop. This price reduction is influenced by broader trade dynamics, particularly the ongoing tariff disputes between Brazil and the US. The US currently maintains an 81.16% tariff on Brazilian sugar, which has contributed to the decline in Brazilian sugar exports to the US, although exports surged in 2024 to USD 769 million, up from USD 543 million in 2023.
Strained trade relations, exacerbated by the US' tariffs on steel and ethanol, have created uncertainty for Brazil's sugar market. If tariffs increase, it could raise costs for sugar producers and reduce demand from the US, a key market. Additionally, declining ethanol imports suggest shifting trade patterns that may impact sugar production and prices.
US sugar prices decreased to USD 0.40/kg in W9, reflecting a 4.76% drop week-on-week (WoW) and a 14.89% YoY decline. Despite this, the outlook for US sugar prices remains stable due to a balanced set of market factors. Projected declines in sugar consumption, down 2.7% for the 2024/25 season, are offset by record-high domestic production expected to reach 9.37 mmt, which will reduce reliance on imports. As a result, the sugar stocks-to-use ratio is forecasted to increase, providing stability in the market and minimizing the potential for significant price fluctuations in the near future.
Mexico's sugar prices decreased to USD 1.09/kg in W9, marking a 1.80% WoW drop and a 36.99% YoY decline from USD 1.73/kg. This decrease is partly attributed to challenges within the agricultural sector, including labor shortages, and an aging workforce. However, the decline in food production, including sugar, has been significant, with overall agricultural output dropping by 2.1% in 2024. The sugarcane industry, along with other agricultural sectors, has seen an output decrease, with a 7.5% drop in the agro-industrial sector. As labor shortages continue to affect production, future sugar prices may remain under pressure due to reduced supply and the difficulties faced by producers. Government programs aimed at supporting farmers could provide some relief, but an aging labor force may hinder a full recovery in the sugar market.
Pakistan's sugar prices remained stable at USD 0.45/kg in W9, reflecting a 49.44% month-on-month (MoM) decrease and a 10% YoY decline. The Punjab government's Nigahban Ramazan Package 2025 has played a key role in stabilizing prices by offering subsidized sugar and flour to consumers, ensuring affordability during the holy month of Ramazan. However, the long-term impact on sugar prices remains uncertain. While government interventions provide short-term relief, sustained subsidies may distort market dynamics, potentially leading to supply shortages or future price corrections once the relief programs end. Additionally, broader economic factors, including inflation and production costs, will influence price stability in the coming months.
Given the US' high tariffs on Brazilian sugar and declining sugar prices in key markets like Mexico and Brazil, exporters should explore alternative trade routes and emerging markets. Strengthening exports to regions with lower trade barriers, such as Africa and the Middle East, can help mitigate losses. Additionally, leveraging regional trade agreements and negotiating lower tariffs in key consumer markets can enhance competitiveness.
With sugar production declining in India and Spain due to lower yields and policy challenges, and supply-chain disruptions affecting multiple markets, industry stakeholders should invest in storage infrastructure and logistical improvements to stabilize distribution. Establishing cooperative storage solutions and expanding refining capacities in strategic locations can help manage price fluctuations and ensure consistent supply to importing nations.
Countries facing significant price fluctuations, such as Pakistan and El Salvador, should enhance coordination between government authorities and sugar industry stakeholders to implement balanced market interventions. While short-term subsidies can provide relief, long-term solutions should focus on sustainable policies, such as modernizing sugarcane farming techniques, supporting labor shortages, and reducing smuggling-related market distortions.
Sources: Tridge, Noticias Agrícolas, PTV, Agrodigital, La Prensa Gráfica, Agroinformación, Opportimes
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