Weight loss drugs have driven global sugar prices to a five-year low

Global sugar prices have fallen to their lowest level in more than five years as weight loss drugs accelerate the decline in demand, forcing consumers to abandon sweets in favor of protein products. This is reported by The Financial Times.

Raw cane sugar futures in New York fell to less than 14 cents a pound on Wednesday, the lowest since October 2020. Traders say this reflects a faster-than-expected slowdown in consumption in the United States and other developed economies, while demand in developing countries is growing more slowly than forecast.

GLP-1 injections for weight loss, which activate the glucagon-like peptide 1 receptor, a hormone that causes a feeling of satiety, have become a key factor in reducing cravings for sweets. GLP-1 is the basis of Novo Nordisk’s Wegovy and Ozempic, as well as Eli Lilly’s Mounjaro and Zepbound.

“The decline in consumption, or the speed of decline, has caught the sugar industry by surprise,” said Gurdev Gill of brokerage Marex.

He added that supply will not be cut quickly by falling prices. Sugarcane requires significant upfront investment and long planting cycles, and many farmers receive government support.

The first GLP-1 tablets, which will make the drugs more affordable and increase their use, were approved in December.

“The impact will continue to grow as the prices of GLP-1 drugs come down and their use becomes more widespread,” said Kona Haque, an agricultural commodities specialist.

Tags: prices, sugar