After continuous decline due to good supply and low quotations, world sugar prices are now being hampered by cheap crude oil.
The West Texas Intermediate (WTI) crude oil on March 5, 2025 slid to $67.66 a barrel, undercutting ethanol rates and in turn sugar prices.
Whenever crude oil gets cheap, ethanol from cane also loses price. Millers relax ethanol processing and switch to sugar production, which adds pressure on sugar rates.
On March 4, 2025, sugar #11 (unrefined) for May delivery in New York declined by 0.66% to a three-week low.
This is even as sugar # 5 (white refined sugar) for May delivery slid by 1.30% in London, same day.
On March 5, sugar in world markets was averaging $18.14 a pound, still below the 19-dollar best of February 23.
January, too, had been bearish, with the FAO sugar index down -6.8% monthly and -18.5% year-on-year.
Additional pressure is coming from futures market technicalities such as huge last minute deliveries to meet contract deadlines. On February 28, Wilmar International Ltd and partners took 1.7 million tonnes of raw sugar to meet an already expired March contract.
Oncoming Stock Low
Despite the crude oil blow, help is on the way after the International Sugar Organization (ILO) doubled the year’s stock deficit.
On February 27, ISO revised the 2024-25 global sugar deficit from 2.51 million tonnes to 4.88 million tonnes.
This estimate mainly owes to production downturn in the second biggest producer, India, and could rescue prices.
The revision could also ease the surplus yoke off world prices, despite Brazil’s 2025-26 record production forecast of 43.6 million tonnes.
How soon global prices could soon join the club of India and Pakistan, where prices have lately improved, depends on crude pressure. To learn more on how oil has historically influenced sugar pricing, skim the statistics below.
Statistics on Crude Oil Influence on World Sugar Prices
While internal factors such as production and demand are the benchmark influencers of sugar prices, external factors count, too. One of these is crude oil, which as the table below indicates, has historically trended side-by-side with sugar prices. Data is from the Federal Reserve Bank, St.Louis and Macrotrends.
| Year | Crude Oil [$/barrel] | Annual Change | Sugar [$/Ib] | Annual Change |
| 2010 | 79.48 | 15.1% | 26.94 | 13% |
| 2015 | 48.66 | -30.15% | 10.67 | -70% |
| 2020 | 39.68 | -20.64 | 10.64 | -10% |
| 2025 [Jan-Mar] | 72.98 | -5.62 | 18.93 | -22.2% |