Global sugar prices jump 7.5% in May despite slight dip in overall food price index
Global sugar prices surged in May, with the FAO Sugar Price Index rising 7.5% to 95.1 points, its highest since October 2025. Concerns over lower sugar output in Brazil, possible El Niño impacts in India and Thailand, and tighter global supplies drove gains despite overall food prices declining slightly.
Global sugar prices recorded a sharp increase in May, emerging as one of the strongest-performing agricultural commodities even as overall food prices edged slightly lower, according to the latest Food and Agriculture Organization (FAO) report.
The FAO Food Price Index, which tracks a basket of internationally traded food commodities, averaged 130.8 points in May, down 0.2 percent from April but still 2.9 percent higher than a year earlier.
In contrast, the FAO Sugar Price Index climbed 7.5 percent during the month to 95.1 points, its highest level since October 2025. The increase marked a significant rebound in the sugar market, although prices remained 13.1 percent below their level a year ago.
The rally was driven by growing concerns over global sugar supplies. In Brazil, the world’s largest sugar producer, data showed a smaller share of sugarcane being allocated to sugar production, raising expectations that more cane would be diverted to ethanol manufacturing. This shift supported international sugar prices, although strong sugarcane crushing and sugar output in late April helped limit further gains.
Additional support came from concerns that El Niño weather conditions could adversely affect sugar production in India and Thailand during the 2026-27 season, potentially reducing export availability from two of the world’s key sugar-producing countries.
The latest rise in sugar prices highlights the market’s sensitivity to supply developments at a time when weather risks and uncertainty over crop prospects continue to influence agricultural commodity markets.
Elsewhere, cereal prices also moved higher in May, with wheat and corn recording gains amid tightening supply expectations and concerns over production prospects in several major exporting countries. Meanwhile, vegetable oil prices fell 4.6 percent during the month, although they remained more than 20 percent above year-earlier levels due to strong biofuel demand and elevated energy costs.
While overall food prices showed signs of stabilizing, the FAO report suggests that supply concerns, weather uncertainty and shifting biofuel demand continue to shape the outlook for global sugar and agricultural commodity markets in the months ahead.
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Source : ChiniMandi
