Sugar prices have dropped to a three-year low due to the Indian government's decision.

On January 20, sugar prices reached their lowest level in over three years. This occurred following the Indian government's announcement of permission to export 1 million metric tons of sugar in the current season, which will last until the end of September.

According to Reuters.

The decision by New Delhi aims to support sugar mills and boost domestic sugar prices, which have been under pressure in recent months. The news came as a surprise to some traders, as sugar production in India is expected to fall below consumption for the first time in eight years this season.

“These developments are likely to exert pressure on global prices,” commented Warren Patterson, head of commodity market strategy at ING.

On the ICE exchange, futures for white sugar dropped to $470 per ton, marking the lowest level since September 2021. Subsequently, the price rose to $473.60 but still remains over 5% lower compared to the beginning of the year.

In the previous season, India did not allow sugar exports; however, this move, in light of low production, presents new challenges for the global market.

Moreover, the situation is further complicated by concerns that Thailand may increase its sugar exports amid a halt in syrup supplies to China. The Chinese authorities are requiring Thailand to inspect dozens of factories before discussions about lifting the export ban on syrup and liquors, which was imposed last month.

Global sugar prices remain under pressure, and inflation continues to impact the world economy. As noted by former Swiss National Bank Chairman Philip Hildebrand, global inflation will remain a primary risk for the economy in 2025.

Background. In Ukraine, the sugar production season for 2024/25 is currently concluding. This year, Ukrainian producers have set a historical record for product exports. Regarding the significant challenge that such a high comparative base may pose in 2025, and what preliminary results can be discussed—such as how much sugar has been produced and its quality—reported Mind.