Sugar prices have fallen to their lowest level in more than five years as the rapid adoption of weight-loss drugs reduces demand, with consumers cutting back on sweet foods in favour of protein, the Financial Times reported.
Raw cane sugar futures in New York are trading at their lowest level since October 2020 and are less than half the peak reached in late 2023. Traders say the decline reflects a sharper-than-expected slowdown in consumption in the US and other wealthy economies, while demand growth in developing countries has also been weaker than anticipated.
A key factor behind the decline is the rapid spread of GLP-1 weight-loss drugs, which reduce appetite and curb cravings for sugary products. These medicines include Wegovy and Ozempic from Novo Nordisk, and Mounjaro and Zepbound from Eli Lilly. By making users feel full sooner, the treatments have encouraged many consumers to cut back on foods such as sweets, biscuits and ice cream.
“The speed of the fall in consumption has caught the sugar industry by surprise,” said Gurdev Gill of commodities broker Marex. He said the impact has been most visible in Mexico and the United States, while demand figures in Europe have also been weak.
Sugar use in developed economies had already been declining slowly as consumers shifted towards healthier snacks. However, analysts say the arrival of these medicines has accelerated the trend and led to a more pronounced change in eating habits.
In its December 2025 supply and demand report, the US Department of Agriculture reduced its forecast for sugar consumption by 23,000 tonnes, estimating total use at 12.3 million tonnes through 2026. The cut was linked mainly to lower direct consumption by consumers.
Stephen Geldart, head of analysis at London-based sugar trader Czarnikow, said the spread of GLP-1 drugs in parts of the US is likely contributing to the trend. He noted that sugar demand is particularly sensitive to changes in behaviour because a relatively small group of consumers accounts for a large share of sales.
According to Geldart, the top 20 per cent of consumers are responsible for about 65 per cent of purchases of products such as biscuits and ice cream. “If those heavy users start taking these medicines, the drop in sales can be much larger than expected,” he said.
Prices have continued to fall even though global sugar output has remained broadly steady at around 180 million tonnes a year. Production remains high in major producing countries such as Brazil and India, and no major producer has yet announced significant cuts.
“Supply and demand have been fairly balanced, and stock levels are not rising sharply,” Geldart said. “Despite that, prices have halved over the past two years because the market has been slow to recognise the scale of the demand shift.”
Gill added that lower prices are unlikely to lead to a quick reduction in output. Sugarcane farming requires large upfront investment and long growing cycles, and in many countries farmers are protected from global price swings by government support. “There are no strong signals yet that production will be reduced,” he said.
Investor sentiment has also turned sharply negative. Bets on falling prices rose late last year and are now close to their highest level in five years, reflecting what analysts describe as very pessimistic market positioning.
The impact of weight-loss drugs could increase further following the approval of the first pill-based versions in December, which are expected to make treatment cheaper and more widely available. Kona Haque, an agricultural commodities specialist, said the effect on food demand is likely to grow as use of the drugs expands.
While sugar prices have been under pressure, parts of the dairy market are seeing the opposite trend. Prices for whey have climbed as demand for protein-rich foods increases, driven by both weight-loss treatments and broader health trends.
“Demand has risen sharply,” said John Lancaster of broker StoneX. He said prices for high-protein whey products used in protein powders and bars are near record levels in Europe and the United States.
Health experts warn that without changes in diet and lifestyle, people using weight-loss drugs may lose muscle as well as fat. As a result, doctors and nutritionists are increasingly advising higher protein intake, adding to demand for whey-based products.
In the UK, shoppers have responded by buying more protein-rich foods. Sales of cottage cheese rose by 50 per cent year on year in January, according to data from Worldpanel by Numerator.
João Paulo Frossard, a consumer food analyst at Rabobank, said food companies are adjusting by reformulating products and placing greater emphasis on nutritional value rather than selling larger quantities.
“This shift is not temporary,” he said. “It is something the industry now has to factor into its long-term plans, as people are eating less and paying more attention to what they consume.”
