Insight Focus
Sugar production costs vary widely across major producers. Costs are lowest in Brazil at USD 335/tonne (15.2 c/lb) of raw sugar while, at the other end of the spectrum, Europe and China incur over USD 750/tonne to produce white sugar. Costs this year have been impacted by changes in beet and cane prices as well as fluctuations in producers’ currencies.
In our Cost of Production Around the World update we look at a sample that represents over 60% of world sugar production.
India: USD 420/tonne for Raw Sugar
The cost of producing sugar in India has been rising steadily in Indian Rupees as a result of the government-set Fair and Remunerative Price (FRP) that mills must pay farmers. The government increases the FRP each year and a 4.5% increase has been announced for 2025/26. This follows the 8% increase we saw in 2024/25.
Depreciation in the India Rupee has however kept the USD cost of producing raw sugar relatively stable over the past few years at around USD 420/tonne (19c/lb), FOB, in Maharashtra (the main exporting region). Additionally, Indian mills have been benefitting from earnings from electricity sales and ethanol production at attached distilleries. These revenues reduce their break-even prices by around USD 50/tonne (2.2c/lb)
EU + UK: Over USD 750/tonne for Refined Sugar
The more competitive industries in Europe (UK, France, Germany and Poland) can produce refined sugar at USD 750-850/tonne, FOB. Revenues from by-products of the beet slicing process can however reduce the break-even point by up to USD 150-200/tonne of sugar.
Lower beet prices paid to farmers as well as reduced energy costs will benefit European sugar factories in 2025/26. These savings are somewhat offset by the strengthening of their currencies against the US Dollar in recent weeks. Overall, we estimate cost of production will reduce by 5-10% year-on-year in US Dollars.
An adverse impact of lower beet prices has however been that farmers have reduced beet plantings by 7% across the EU and the UK for the 2025/26 beet slicing campaign.
Thailand: USD 360/tonne for Raws, USD 480/tonne for Refined
In the 2024/25 season, Thailand’s raw sugar cost of production is estimated at USD 420/tonne (19 c/lb – FOB basis) and refined sugar at USD 560/tonne. COP levels were broadly in line with the prior season, with the main change coming from the government’s lower provisional cane price of THB 1,160/tonne, down 18.3% year-on-year from THB 1,420/tonne. Sugar yields held steady at 10.95%, close to the average of 11%.
For 2025/26, raw sugar COP is projected at USD 360/tonne (16.3 c/lb) and refined at USD 480/tonne, reflecting an expected further drop in the provisional cane price to around THB 950/tonne — 18.1% below the 2024/25 level.
Brazil: USD 335/tonne for Raw Sugar (FOB)
In 2024/25 season, we estimate that raw cane sugar cost of production was around USD 335/tonne (15.2 c/lb) – FOB basis. On a USD basis, it looks like a 2% reduction in cost of production, however it is a consequence of the BRL weakening 13% from one season to the next. But overall, costs in BRL saw an increase with inflation, higher diesel prices (which rose on average 5% YoY) and as well as lower agricultural yield in 2024/25 that affected average costs.
For 2025/26, the same factors are expected to influence costs, pressuring margins on an environment of lower sugar and ethanol prices.
China: USD 775/tonne for Cane Crystal Sugar
Under Chinese government’s guidance of sugar self-supply rate at 70%, China’s cane price has been increased by 6% in Guangxi state and 11% in Yunnan state in 2023. The sugar production of these two states accounts for 80% of national sugar production. High cane prices encourage farmers to grow more sugar cane, but it also increases the cost of producing sugar.
