Sugar price surges in recent weeks

Sugar prices have risen quite significantly in the past few weeks on the futures markets in London and New York. Sugar also stands out in the FAO Food Price Index for August, which has risen across almost the entire board. The FAO sugar price index rose by almost 12% in one month. Grain prices also rose significantly and reached their highest level in more than two years.On the ICE in London (refined sugar), sugar prices rose by more than 14% over the past six weeks. In New York (raw sugar), the increase was even stronger, at almost 24%.The FAO Food Price Index came in at 133.3 points in August. That is 1.9% more than in July and 2.5% more than a year ago. All five product groups tracked by the United Nations food organisation became more expensive. Despite the increase, the index is still almost 17% below the peak of March 2022.The biggest outlier is sugar. The FAO Sugar Price Index rose by 11.9% to 106.4 points, the highest level since June 2025. Concerns about global sugar production in season 2026/27 are the main cause of this.In the European Union, the persistent heat and drought have led to lower expectations for sugar beet yields. This comes on top of a smaller beet acreage. In major Asian producing countries too, production prospects are under pressure due to weather conditions associated with El Niño.In addition, sugar production in the main growing region in Brazil is lower. The decision by India to temporarily exempt imports of raw sugar from import duties also gave the international sugar price an extra push upward.Wheat prices risePrices are also continuing to rise in the grain market. The FAO Grain Price Index rose by 2.2% in August to 116.3 points. This puts the grain index at its highest level since May 2024.Wheat became on average 2.6% more expensive than in July and is now trading 15% above the level of August last year. Ongoing problems with grain exports from the Black Sea region are the basis for this. In addition, heat and drought have depressed harvest expectations in parts of Europe. A weaker dollar also supported international trade.The international maize price rose by 2.5%. Concerns about yields in parts of the US Corn Belt and deteriorating harvest prospects in the EU in particular play a role. At the same time, demand from the animal feed and ethanol industries remains firm and Ukrainian exports are experiencing disruption. Barley became 2.6% more expensive and sorghum 3.9%. The international rice price rose by a more limited 0.5%.Dairy recoversThe dairy price index rose for the first time in four months and came out 2.3% higher at 119.2 points. Milk powder and cheese in particular became more expensive. Skimmed milk powder rose 3% in price and whole milk powder 2.4%. Cheese became on average 2.7% more expensive.In the EU in particular, tighter milk supplies and warm and dry weather are causing higher prices. In Oceania, the picture is the opposite. There, milk production is increasing seasonally, putting pressure on prices. Despite the recovery, the total FAO dairy index is still almost 22% lower than a year ago.Meat slightly more expensive on averageMeat also became more expensive. The meat price index rose by 1%. Poultry, pork and lamb increased, while beef became cheaper. For pork, the FAO specifically points to the European market. High temperatures slowed the growth of pigs, leaving fewer slaughter-ready animals available. That led to some price recovery in Europe. In contrast, ample supply in Brazil is causing prices there to fall.Brazilian beef exports are weakening further because the quota for China has been almost fully used. This applies even more strongly to sales of Australian beef. That country had already reached the quota thresholds for exports to China and Korea. This is causing increasing competition in other markets.Vegetable oil continues to riseVegetable oil became on average 0.6% more expensive in August. It was the third monthly increase in a row and the FAO index thus reached its highest level since June 2022.Palm and soy oil pushed the index higher. For palm oil, firm international demand and concerns about the impact of El Niño on production in Southeast Asia play a role. Sunflower and rapeseed oil became slightly cheaper. In that market, supply for season 2026/27 is expected to be ample.