Global white sugar prices have surged to match European levels, putting producers in a strong position as food manufacturers and retailers gather in Paris to negotiate next year's supply deals.

Benchmark prices tracked by the International Sugar Organization hit $567.80 (about €506) a tonne on 15 October – the highest level since November 2024 and a 37% jump since mid-April.

That puts the global rate just above the European Union's average price of €500 in August.

[explore layer="prices" price="ds:495231" pto="2026-10-17" title="World white sugar price, 2020–2026" subtitle="ISO white sugar price index (ICE London No.5), US$ a tonne, daily: $567.80 on 15 October 2026, up 37% from $415.90 on 15 April and the highest since November 2024, against a peak of $757.80 in November 2023"]

The price spike comes as buyers and sellers meet at the SIAL Paris trade fair this week to lock in annual supply contracts.

Unlike many commodities, almost none of Europe's sugar is bought for immediate delivery on the spot market. According to a 6 October report from the US Department of Agriculture (USDA), about 98% of EU sugar is sold through annual deals, meaning current negotiations will dictate prices for the year ahead.

Earlier in the summer, negotiations had largely stalled. In June, commodity platform Vesper reported that buyers were holding out for €530 a tonne while sellers demanded €600, resulting in very little trading.

Since then, the market has tightened significantly.

"The world market is not flooded with sugar. The European market is undersupplied with sugar," Niels Pörksen, chief executive of Europe's largest sugar producer, Südzucker, told Reuters after the company's first-half results on 8 October.

"So I can't see anything else than a further increase of sugar prices."

DROUGHT AND TRADE RULES SQUEEZE SUPPLY

Europe's domestic sugar supply has been hit hard by both extreme weather and shifting trade rules.

The European Commission estimates EU sugar production will fall to 13.4 million tonnes for the season that began on 1 October, down from 16.6 million tonnes the previous year – a drop of about 19%.

In France, a severe summer drought is expected to slash the sugar beet harvest by 30% to 25.3 million tonnes. That would mark the country's smallest crop since records began in 1980.

A long pile of harvested sugar beet stacked at the edge of a field under an overcast sky, with electricity pylons on the horizon

At the same time, Brussels has tightened rules on imports. In late May, the EU suspended its "inward processing" scheme for one year, closing a customs channel that allowed raw cane sugar to enter duty-free to be refined and re-exported.

The move has choked off the main source of cheap raw sugar for refineries in Spain, Portugal and Italy. Imports from Brazil – which relied heavily on the scheme – plunged from 268,000 tonnes in June to fewer than 7,000 tonnes in July, the USDA said.

Meanwhile, global raw sugar prices have risen 50% since mid-April to 20.40 US cents a pound. They touched a 19-month high of 21.24 cents on 7 October as rain delayed Brazil's cane harvest.

The European Commission is due to review the import suspension by the end of November. However, the USDA noted that large existing stockpiles and alternative import channels should prevent EU prices from returning to the peaks seen in 2023.

COCOA AND WHEAT RISE, BUT OLIVE OIL TUMBLES

Food manufacturers are also facing sharply diverging costs across other key ingredients as they head to the negotiating table.

International Cocoa Organization figures show prices reached €5,248 a tonne on 15 October, up 73% since mid-April and more than double their February low. Broker ADMIS linked the rise to lower-than-normal rainfall in Ivory Coast and south-western Ghana associated with El Niño.

Meanwhile, European third-quarter cocoa grinding – a key measure of demand – rose 3.2% year-on-year, the first increase since mid-2024. Despite the rally, prices remain 19% below the €6,460 recorded just before the last SIAL Paris fair in October 2024.

[explore layer="prices" price="ds:556139" pto="2026-10-17" title="Cocoa prices since SIAL Paris last met, October 2024–October 2026" subtitle="ICCO daily price, € a tonne: €6,460 on 17 October 2024, a low of €2,448 on 27 February 2026, a high of €5,838 on 31 August and €5,248 on 15 October"]

In the dairy sector, milk protein and fat prices are moving in opposite directions. In early October, French skim milk powder jumped 63% year-on-year to €3,389 a tonne, European Commission data show. By contrast, French butter fell 19% over the year to €4,352 a tonne.

At the Global Dairy Trade auction on 6 October, skim milk powder reached its highest level since June 2022, while butter fell for an eighth consecutive sale.

[explore layer="prices" price="ds:99045,ds:99044" pto="2026-10-17" title="French skim milk powder and butter prices, 2020–2026" subtitle="Weekly European Commission prices, drawn in US dollars a kilogram (converted from euros). In the week of 5 October 2026 SMP was €3,389 a tonne, up 63% on the year, and butter €4,352, down 19%"]

Grain has also become more expensive. European milling wheat at the French port of Rouen reached €249.79 a tonne in early October, while French feed maize hit €264.56 the week prior – both up more than 30% on the year. The UN's food agency said world wheat prices hit their highest level since August 2023 in September, as transport bottlenecks in the Black Sea region pushed importers towards other suppliers.

For olive oil and coffee, however, buyers have the upper hand.

Italian extra virgin olive oil has halved in price over the past year to €4.37 a kilogram at origin, while Spanish oil is down 22% to €3.32 ahead of a forecast 23% jump in Spain's harvest.

Arabica and robusta coffee prices have also dropped by roughly a fifth compared with a year ago, with the World Bank's arabica price averaging $7.26 a kilogram in September.

[chart slug="sial-2026-price-backdrop-scorecard"]

In comments published in July, Axel Touzet, head of Nestlé's coffee brands unit, told Reuters the company would "take into account the decline when we decide on our coffee prices".

'VERY TOUGH' SUPERMARKET TALKS AHEAD

The surge in sugar, cocoa and grain costs sets the stage for tense discussions between food producers and supermarkets when France's formal 2027 retail negotiations open on 1 December.

French suppliers are hoping to claw back margins after a flat year. In the last round of talks, which closed on 1 March, manufacturers requested price rises of about 3.5% on national brands, but had to settle for an average increase of just 0.05%, according to government figures. Only sweet groceries and frozen foods saw rises of about 1%.

Pact'Alim, which represents small and medium-sized food businesses, said the outbreak of the war in Iran happened just as those deals were being finalised, meaning companies could not factor the resulting costs into their contracts.

Supermarket bosses are already bracing for a battle over shop-floor prices.

Michel-Édouard Leclerc, who chairs the strategy committee at French retail giant E.Leclerc, warned on 12 October that manufacturers were demanding steep hikes.

Speaking on franceinfo, in remarks reported by Journal du Net, he said the upcoming negotiations would be "very tough".