European Retail: Sugar expert call: What did we learn?

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European Retail: Sugar expert call: What did we learn?

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European Retail

Sugar expert call: What did we learn?

Industry Overview

Signs of supply imbalance normalising… 16 June 2026

Last Friday, we hosted Tereos ex-executive Michel Laborde for a discussion on sugar High Yield Credit

market dynamics & outlook. Michel considers that peak sugar supply is behind us and Europe

sees signs that the surplus is shrinking. He expects supply surplus to ease in 26/27 Retail

SMY (CY27) from previous years in response to prolonged low sugar prices, leading to Mark Xu, CFA

more balanced & tighter market. In Brazil: output will decline (even in the case of a Research Analyst

stable crop) as producers switch to ethanol production (sugar c.48% of the mix). In BofASE+33 1 8770(France)0863

Thailand: some farmers are switching production to cassava. In India: El Niño is causing mark.xu2@bofa.com

very dry conditions for planting, while in Europe: acreage is expected to decrease by 7% Conor Forde

Research Analyst

to 8% but lower exports may help balance the market. In addition (as prices are in USD), MLI (UK)

a weaker dollar is affecting sugar exporter’s top-lines. +44 20 7996 1054

conor.forde@bofa.com

…price inflection not till 2027… JoffreyResearchBellichaAnalyst Meller >>

Current sugar price (NY11) at $0.14/lb (-15% yoy, -40% vs 2023) is near 5-year low. MLI (UK)

+44 20 7995 7497

However forward price starts to show early positive signs, with 2027 at $0.15-0.16/lb, joffrey.bellichameller@bofa.com

which in turn also increases the cost of imports to Europe. Michel sees bullish

fundamentals building, but not yet reflected in current sugar prices. This is

because the market is still largely trading on prices set during the previous negotiation CY: Calendar year

round.