The European sugar sector was slowly recovering from its typical price levels, however, during the first quarter of 2020, the market suddently changed due to several factors all regarding the pandemic. First of all, there was a drastic reduction in consumptions, which triggered a strong and sudden drop in the raw materials’ prices. This caused the positive trend in the international sugar market to slow down.
Furthermore, the collapse of oil price also contributed to intensify the production of sugar over the production of ethanol globally. In Europe, the consumption decline coming from the governments’ restritions led stocks to well exceed 2 million tonnes at the end of the campaign. All of this contributed to the pressure on domestic prices which decreased to around $450/ton.