The gap between refined white sugar and its raw counterpart has jumped to the highest level in over a year, with Pakistan’s recent buying spree fuelling demand for the pricier variety.
In London, white sugar futures climbed as much as 2.6% to US$490 a tonne, lifting the premium over raw sugar to US$125 a tonne—a margin not seen since July 2024, according to Bloomberg data.
That premium matters. Once it pushes past the US$100 mark, refiners typically find it worthwhile to process raw sugar into the refined product.
Pakistan’s Purchases Tighten Market Outlook
Last week, Islamabad issued a tender for 200,000 tonnes of refined white sugar, a move closely watched by traders. The timing is critical: global white sugar supplies are projected to shrink from the fourth quarter of this year and remain tight heading into 2026.
“Pakistan remains a major driver of demand for refined sugar, consistently pushing premiums higher,” said Claudiu Covrig, lead analyst at Covrig Analytics. He added that the December futures contract is turning bullish as supply worries deepen.
Why It Matters
For refiners, the current spread signals stronger profitability. For importers, particularly food and beverage producers, rising refined sugar costs could translate into higher expenses down the line. Pakistan’s entry into the market underscores how quickly demand from a single large buyer can reshape global pricing dynamics.
