London white sugar eases as December expiry nears

ICE Europe White Sugar No.5 futures for December 2026 delivery settled at US$505.10 per tonne on Tuesday 10 November, down US$4.50 on the day. The more actively traded March 2027 contract settled at US$512.40 per tonne, down US$4.90. A day earlier, December had settled at US$509.60, up US$7.40, so Tuesday's move cancelled most of Monday's gain in the spot month.

The main development is not a single headline but a shift in the structure of the London market. White sugar fell on Tuesday mainly because raw sugar in New York weakened, yet the white premium held up, and the gap between December and March stayed narrow. That matters for refiners and beet processors, whose margins depend on the difference between raw and refined values rather than on the headline price alone.

A firm white premium cushions the fall

The white premium is the gap between London white sugar and New York raw sugar, converted into dollars per tonne. It roughly shows what refiners earn for turning raw cane sugar into white sugar. The March 2027 premium was about US$113.58 per tonne on Tuesday evening. Earlier in the week it had climbed to about US$116, the highest since mid-September, helped by buying in the December contract.

On 10 November, March 2027 whites opened lower with raw sugar, then tested the previous Friday's low of US$509.70 and bounced on short covering by day traders. Firmness in December spreads limited the fall. The December/March spread traded between minus US$8.50 and minus US$6.00. Open interest in London has been moving out of December and into March and later months.

One possible explanation for the firm spot month is Demand for nearby refined sugar ahead of the December delivery, although that is a hypothesis rather than a confirmed cause. Traders are also watching whether the December/March spread will move back to a premium.

Raw sugar weakness is the main drag

The pressure on white sugar came from New York. ICE raw sugar No.11 for March 2027 settled at 18.09 US cents per pound on Tuesday, down 0.12 cents, after briefly falling below 18 cents for the first time since August. Because white sugar is made mainly from raw sugar or from beet that competes with it, London prices rarely move far from New York for long. If raw sugar falls, refiners can usually buy feedstock more cheaply, but white sugar prices tend to follow it down.

Speculative positioning has also been easing. Funds cut their net long in raw sugar to about 146,000 lots in the latest Commitments of Traders data, mostly by selling long positions. When funds unwind, prices can fall even if physical Supply and demand have not changed much.

Associated British Foods: lower European prices already hurting

Associated British Foods (LSE:ABF) is the clearest UK-listed company exposed to white sugar. Through AB Sugar, it owns British Sugar in the UK, Azucarera in Spain and Illovo in southern Africa. In its full-year results for the 52 weeks to 12 September 2026, published on 3 November, ABF reported an adjusted operating loss of £47 million in Sugar. It said the loss was mainly due to lower average selling prices in Europe than in 2025, and sugar Revenue fell 9% at constant currency.

ABF expects a larger Sugar adjusted operating loss of £70 million to £170 million in the 2027 financial year. It said significantly higher gas costs, El Niño's effect on African production and currency moves, especially in the Malawian kwacha, could change that figure in either direction. The group warned that 2027 adjusted operating profit and Earnings Per Share would be lower than in 2026, mainly because of Sugar.

For LSE:ABF, London white sugar is a reference point rather than a direct price. UK and EU beet sugar is sold largely under contracts that often run for a season or longer, so a move in the December contract does not feed straight into revenue. Still, a weaker London market can put pressure on contract renewals, while a firm white premium could help processors whose Margin is tied to refined values. Sugar is also only one part of a group that includes Primark, grocery and ingredients, so the share price reflects much more than sugar.

What could lift or weigh on the outlook

Prices could find support if the white premium keeps widening, if the December contract expires with solid physical demand, or if weather disrupts crops. ABF (LSE:ABF) has flagged El Niño risks to African production. A weaker US dollar or a firmer Brazilian real could also support dollar-denominated sugar prices.

On the downside, further fund selling in New York, a slide in raw sugar below the 18-cent level it tested this week, or easier refined supply after expiry could pull London lower. Higher European energy costs could squeeze beet processors' margins even if white prices hold steady, and ABF has said gas costs are a key uncertainty.

What to watch next

  • December 2026 London expiry. Traders will watch whether the December/March spread moves back to a premium as the contract runs off.
  • Brazil centre-south output data from UNICA. These fortnightly reports influence raw sugar, and therefore whites.
  • CFTC Commitments of Traders. These data show speculative positioning in raw sugar and are normally released on Fridays, although the US Veterans Day holiday on 11 November could affect timing this week.
  • ABF updates. The next trading statement from LSE:ABF and any updates on British Sugar's restructuring will help show how European prices are feeding through to company results.