How has COVID-19 impacted the general sugar market?

Despite a recovery in prices since the beginning of the pandemic, higher sugar production is expected to negatively weigh the prices. Currently, mills are producing more sugar because the price of ethanol is low. In Brazil, the largest sugar-producing country in the world, the reduction in ethanol demand during the first two months of lockdown measures represented the equivalent loss in demand of about 4 million tons of sugar. Because of the direct link between sugar and energy markets, any escalation of tension in the Middle East can impact the price of sugar around the world as well, further weighing on sugar’s trading price. While baking and cooking at home has become an increasingly popular activity during the pandemic, the lack of driving (ethanol) and eating out (sugar) hasn’t helped to offset the revenue loss.