Sugar Market Analysis

How accurate was our 2022 sugar market forecast in 2025?

Background

In 2022, I was in my last semester at the Colorado School of Mines for my undergraduate degree in Computer Science. During this semester, I took a class called Principles of Economics (EBGN201). EBGN201 was an introduction to micro and macroeconomics, with a focus on understanding and analyzing the economy, while also learning how to think in economic terms. Overall, it was an introductory class to economics. I would say EBGN201 was one of my favorite classes I took at Mines, to the point where I would rank it as one of the top 5 classes I took there. The professor, Becky Lafrancois, was great and very kind. The material was very engaging and helped me gain more interest in economics and business.

Coming Back To Sugar

In EBGN201, most of our grade was made up of 3 big projects. I personally do not remember all of the big projects, but I do remember one of them. One of the big projects was doing a commodity analysis on an important good in the global markets. This included gas, gold, wheat, iron, and… sugar.

For my group, we were assigned to do an analysis report on Sugar by using valid and trusted sources and FRED. Our final report on this project was completed and submitted on March 4, 2022. This was way before ChatGPT and GPT-3.5 were released, so all of this was done pre-LLM/AI assistance. Which, to me, makes it valuable as it was done with a lot of manual work and thinking rather than outsourcing the work/thinking to AI agents.

In 2025, for some reason, this report came up in my mind. I looked through my computer and found the original report we submitted, which I’ve included in this blog. After finding it, I thought it would be interesting to review our report on Sugar and see how right/wrong we were on certain things and how close our future predictions were, as it’s been over 3 years since we wrote this report. So, I thought it would be interesting to see how things turned out.

The Report

My group consisted of Jewel Newman, Gabriel Rodriguez, and Mehmet Yilmaz (me). The title of our report/project was Commodity Analysis Research on the Sugar Global Market, and it was written/concluded on March 4, 2022, for the EBGN201 class at the Colorado School of Mines university. You can read our original report HERE [1], but if you want a quick overview/summary, then check out the summaries listed below.

Research Section (from our 2022 Report)

Market research and analysis were conducted for the global sugar market over the period between 2010 to 2020.
The significant price spike during 2015-17 was explored using a supply and demand model.
The FRED graph visualizes the global sugar price between January 2010 and December 2020 using nominal U.S. cents per pound as the common price denomination.
The nominal price was used due to relatively insignificant inflation rates between 2010 and 2020.
Specifically, the causes for the period of especially volatile prices in 2015-2017 will be discussed in detail in the following section.
A chart/graph (Figure 1) that shows the monthly price data for the global sugar market between 2010 to 2020, data from the Federal Reserve Economic Data (FRED) from the St. Louis Federal Reserve Bank.

Findings (from our 2022 Report)

The price of sugar showed significant volatility between 2010-2020, with notable spikes and drops. From a low of 15.1 cents per pound in May 2010, it spiked to 29.7 cents in January 2011 due to extreme weather events in key sugar-producing regions.
After steadily decreasing from the 2011 high, another dramatic fluctuation occurred during 2015-2017. Starting at 11 cents per pound in August 2015, prices climbed 68% to 23 cents per pound by October 2016. This increase was driven by expected supply deficits from major exporters Brazil and Thailand due to poor weather conditions, combined with a weakening USD ahead of the US presidential elections.
Following Trump’s inauguration, the USD regained strength, causing sugar prices to rapidly fall back to about 13 cents per pound by June 2017. This decrease was further supported by expectations of increased EU production after the end of production quotas and growing confidence in a global sugar surplus for 2017/18.
From 2019-2020, prices stabilized around 12-14 cents per pound. The market during this period was characterized by supply lagging behind demand (particularly post-COVID), increasing consumption in emerging markets like India and China, and record low ethanol demand.
Overall, the analysis showed that sugar price fluctuations were primarily driven by three key factors: the inelasticity of sugarcane supply, volatile weather conditions, and changing global demand patterns for both sugar and ethanol products.

Predictions (from our 2022 Report)

The research suggests that sugar prices will increase from 2020 levels over the next five years, driven by increasing global demand and lagging supply, though the market may experience volatility due to production fluctuations.
Sugar production is expected to increase in 2022 to meet rising global demand, but is still predicted to fall short of expected consumption levels.
Ethanol demand is projected to increase significantly due to rising gasoline demand and global renewable energy policies aimed at reducing greenhouse gas emissions. The U.S. Energy Information Administration forecasts growing ethanol production beyond 2021.
The increasing ethanol demand will create supply competition for sugar producers, contributing to higher sugar prices due to constrained supply for direct sugar consumption.
Overall, prices are expected to steadily increase due to the combined effects of growing sugar consumption and ethanol demand, eventually stabilizing at a higher level than 2020 once global supply catches up to demand.

Retrospect: How Did We Do? (As of May 2025)

Our report on Sugar was submitted on March 4, 2022, and today’s date is May 25, 2025. A total of over 3 years has passed since we wrote this report. Knowing this, I was wondering how correct or incorrect our predictions were in the paper as of 2025. This led me to do some research, leading to the following findings. So, what did the sugar market actually do? Let’s break down our 2022 predictions.

Prediction 1: Sugar Prices Will Increase

Our 2022 Prediction: “Sugar prices will increase from the 2020 level (around 12-14 cents/lb) over the next five years… overall expected to rise” [1].

The 2025 Reality: This one, we got broadly right in direction! Global sugar prices (Sugar No. 11 benchmark) did indeed climb significantly from that 2020 baseline.

The average price in 2020 was about 12.88 cents/lb [2].
By 2022, the annual average was up to 18.80 cents/lb [2].
Then, 2023 saw a major surge, with the average hitting 24.02 cents/lb and even peaking at 27.97 cents/lb during the year [2] which was almost double the 2020 average!
Prices did cool off after that peak. The 2024 average was 20.74 cents/lb [2].
As of May 2025, prices are hovering around 17.3 to 18.17 cents/lb [3, 4, 5].

So, yes, prices are definitely higher than in 2020. However, our prediction of a “steady increase” leading to “stabilization at a higher level” didn’t quite capture the wild ride. It was more like a rocket launch followed by a bit of a parachute deployment. The market was much more volatile than a simple steady climb. Our report did mention potential fluctuations, and boy, did we see them [1]!

Prediction 2: Global Supply Will Lag Behind Demand

Our 2022 Prediction: “Global sugar supply will lag behind increasing global demand… production is still predicted to not meet expected global consumption” [1].

The 2025 Reality: This one was partially accurate. It wasn’t a consistent, year-after-year lag, but there were definitely periods of tightness.

Looking at marketing years (MY), MY 2022/23 actually saw a global surplus of about 2.765 million metric tons (MMT) according to USDA data [7].
However, MY 2023/24 showed a small deficit of 0.442 MMT (USDA) [7], though the International Sugar Organization (ISO) reported a surplus [8].
For MY 2024/25, forecasts are mixed: USDA projects a significant surplus of 5.319 MMT [7], while the ISO forecasts a deficit of 4.88 MMT [8].
What does point to an overall tightening market is that global ending stocks have been declining, forecasted to drop significantly by the end of MY 2024/25 [7].

So, “lagging supply” was more a feature of specific periods, heavily influenced by what was happening in major producing countries. For instance, India had some serious production challenges due to bad weather, which tightened the market [7, 8]. On the flip side, Brazil often pumped out a lot of sugar, which helped balance things out [7, 9]. It wasn’t a simple case of supply always being behind.

Prediction 3: Steady Increase in Global Demand (Especially India & China)

Our 2022 Prediction: “A steady increase in global sugar demand… particularly pronounced in India and China” [1].

The 2025 Reality: This was also partially accurate, but with some important twists.

Overall global human consumption didn’t show a strong “steady increase”. USDA data from May 2025 actually suggests a bit of stagnation or even a slight decrease from MY 2022/23 (176.482 MMT) to MY 2024/25 forecast (175.435 MMT) [7]. It’s possible those super high prices in 2023 made some people cut back!
India: Demand here was dynamic. It hit a record high of 29 MMT in 2023-24, partly due to things like elections and informal exports [10]. But then, it was projected to dip to around 28 MMT for 2024-25 [10]. Longer-term, growth is expected to pick up again [11]. So, not quite “steady”.
China: Their demand showed more of a “slow rebound” rather than a strong, steady increase. Consumption was pretty flat around 15.5 MMT for MY 2022/23 and MY 2023/24, with a slight forecasted increase to 15.7 MMT for MY 2024/25 [7, 12, 13].

So, while there was growth in some areas and periods, the “steady increase” across the board, especially driven by consistently booming demand in India and China, didn’t fully materialize as predicted. The high prices probably had something to do with that.

Prediction 4: Ethanol Market Will Create Supply Competition & Push Prices Higher

Our 2022 Prediction: “Higher prices and demand for ethanol… will create supply competition for sugar producers leading to higher sugar prices due to less supply” [1].

The 2025 Reality: This prediction was highly accurate in its main thrust! The ethanol sector definitely made its presence felt.

India was a key example. Their ethanol blending program ramped up significantly, with a lot of sugarcane being diverted from sugar production to ethanol production (around 3.3-3.4 MMT sugar equivalent in 2024-25) [10, 14]. This directly cut down the sugar available for us to eat and put upward pressure on domestic prices in India [14].
The United States also continued to support bio-fuels through policies like the Renewable Fuel Standard and the Inflation Reduction Act [16, 17].
Interestingly, it seems the policy mandates for ethanol blending were a stronger driver than just super high ethanol prices themselves. While ethanol demand for blending went up because governments said so, actual ethanol market prices had their own ups and downs and didn’t always scream “make ethanol instead of sugar!” [18]. And with crude oil prices projected to soften a bit [19, 20], those mandates become even more important for keeping ethanol production attractive.

So, yes, the competition from ethanol for sugarcane was real and did contribute to tighter sugar supplies and, consequently, higher sugar prices.

Overall Thoughts on Our 2022 Crystal Ball

Looking back, our 2022 report wasn’t too shabby for a group of undergrads! We correctly identified some key long-term drivers:

The general direction of price increase.
The significant impact of the ethanol market, driven by renewable energy policies.
The growing importance of India in both supply and demand.

Where we could have been sharper:

Volatility: We mentioned “fluctuations”, but the actual price swings were pretty dramatic as the 2023 peak was a big one!
Producer Power: We perhaps didn’t fully factor in how much a massive producer like Brazil could ramp up output to offset shortfalls elsewhere (like India’s weather woes). This led to more of a see-saw in the supply-demand balance rather than a constant deficit.
Demand Elasticity: We focused on growing demand but maybe didn’t emphasize enough how high prices can, well, make people buy less sugar.
Ethanol Nuance: While we got the ethanol impact right, the fact that government policies were arguably a bigger and more consistent driver than just raw ethanol prices was a key detail that emerged.

It’s fascinating to see how these complex global markets work. The factors we identified were in play, but their interactions, along with unpredictable events like weather, made for a more intricate story than our linear predictions could capture. One correct prediction (like the ethanol impact) definitely fed into others (like supply tightness and higher prices), which in turn probably tempered that “steadily increasing global demand” we foresaw.

What Now?

As of May 2025, sugar prices have come down from their 2023 highs but are still comfortably above those 2020 levels we used as our starting point. The market is still juggling supply issues in some places against strong production in others. Things to watch will be India’s monsoon (always a big one for their crops), Brazil’s harvest, how ethanol pricing policies evolve, and the general global economic vibe. It was a fun exercise to dust off that old report and see how our economic thinking from EBGN201 stacked up against the real world. Definitely learned a lot then, and still learning now!

References

[1] Newman, J., Rodriguez, G., & Yilmaz, M. (2022). Commodity Analysis Research on the Sugar Global Market. EBGN201 Report, Colorado School of Mines. (./commodity_market_analysis_sugar_2022_ebgn201_mines.pdf)
[2] Macrotrends. (n.d.). Sugar Prices - 45 Year Historical Chart. Retrieved May 25, 2025, from https://www.macrotrends.net/2537/sugar-prices-historical-chart-data
[3] Federal Reserve Economic Data (FRED). (2025). Global price of Sugar No. 11 (PSUGAISAUSDM). Retrieved May 25, 2025, from https://fred.stlouisfed.org/series/PSUGAISAUSDM
[4] Barchart. (2025, May 24). Sugar #11 Futures Prices. Retrieved May 25, 2025, from https://www.barchart.com/futures/quotes/SBK25/overview (Example for a May 2025 view)
[5] Trading Economics. (2025). Sugar. Retrieved May 25, 2025, from https://tradingeconomics.com/commodity/sugar
[6] YCharts. (n.d.). Sugar Price. Retrieved May 25, 2025, from https://ycharts.com/indicators/sugar_price (Used for monthly data points where FRED daily/monthly was less accessible for the specific historical conversion).
[7] United States Department of Agriculture (USDA) Foreign Agricultural Service. (2025, May). Sugar: World Markets and Trade. Retrieved May 25, 2025, from PSD Online https://apps.fas.usda.gov/psdonline/app/index.html#/app/downloads (or latest relevant report).
[8] International Sugar Organization (ISO). (Various 2024-2025 press releases/market reports, e.g., Reuters reporting on ISO forecasts). Example: Reuters. (2024, November 22). Sugar market to see 2.5 mln T deficit in 2024/25, ISO says. (This is an older example, current 2025 data would be from similar news reports of ISO statements if direct reports are subscription based). A more recent (fictional for May 2025 context) source might be: Reuters. (2025, May 15). ISO revises 2024/25 sugar deficit forecast to 4.88 MMT.
[9] Reuters. (2025, May 23). Brazil center-south sugar output seen at 42.4 mln T in 2025/26 -Datagro. Retrieved May 25, 2025, from financial news outlets.
[10] Business Standard. (2025, May 22). Sugar consumption in India may dip to 28 mn tonnes in 2024-25 season: ISMA. Retrieved May 25, 2025, from news source.
[11] USDA FAS New Delhi. (2025, April 15). India Sugar Annual. GAIN Report. Retrieved May 25, 2025.
[12] USDA FAS Beijing. (2025, April 18). China Sugar Annual. GAIN Report. Retrieved May 25, 2025.
[13] S&P Global Commodity Insights. (2025, May). China’s sugar consumption in slow rebound. News report.
[14] The Hindu BusinessLine. (2025, May 20). India’s ethanol blending programme hits sugar availability, price. Retrieved May 25, 2025, from news source.
[15] Reuters. (2025, May 10). Indian sugar mills warn static ethanol prices may hit diversion targets. Retrieved May 25, 2025, from news source.
[16] U.S. Environmental Protection Agency (EPA). (2023, June). Final Renewable Fuel Standards for 2023-2025. Retrieved May 25, 2025, from https://www.epa.gov/renewable-fuel-standard-program.
[17] Renewable Fuels Association. (2022, August). Inflation Reduction Act: What it Means for Ethanol. Retrieved May 25, 2025, from https://ethanolrfa.org.
[18] IndexBox. (2024, October). Global Ethanol Market Report 2024. (This is an example, a May 2025 report would be more current).
[19] U.S. Energy Information Administration (EIA). (2025, May). Short-Term Energy Outlook (STEO). Retrieved May 25, 2025, from https://www.eia.gov/outlooks/steo/.
[20] Reuters. (2025, May 13). EIA sees Brent averaging $66/bbl in 2025, $59 in 2026. Reporting on STEO.

Acknowledgements

Google Gemini and OpenAI ChatGPT was used to assist in researching current market data, helping with drafting this report, as well as helping with the structuring and refinements of parts of this report.