Elizabeth Abbot’s “bittersweet history” of sugar is a compelling read1. The section on “slave-sugar complex” is a testimony of crimes against humanity that history witnesses time and time again. For […]
Lately, the key driver for falling sugar price has been the sharp fall in the Brazilian real. The drop in sugar price has mirrored the drop in the value of real which has weakened from 2.20 to 3.30 to the dollar in the past 6 months. The price of sugar fell to US12.7¢ per pound on 13th March, the lowest since March 2009 when the real hit a 12-year low against the US dollar. Since late January, the sugar price has dropped 20%, which is now below the cost of production for producers in Australia, who export 80% of their output.
According to FO Licht’s latest forecast, the sharpest decrease in output is expected in South America, where total output is seen falling by 3.4 mln tonnes year-on-year to 44.2 mln. Bulk of the reduction is from Brazil where sugar output fell 6.8% on the year to 31.956 mln tonnes (34.267).
Against the backdrop of rising consumption, doubts begin to appear as to whether the global industry can supply the additional 20 million tonnes sugar by 2020. What is clear at […]
Sugar prices are poised to go down further as India’s Food Minister approves an export subsidy of INR 4000 (U$65) per tonne. Some 1.4 mln tonnes of sugar is available for export. Final approval from the Indian Cabinet is awaited. This will invariably check the rally in sugar prices following the announcement by the Brazilian government of a large rise in gasoline taxes, thereby making ethanol more competitive resulting in increased diversion of cane for fuel rather than sugar production.
Other influences on price movements include the effect of the strong US dollar; pressuring international sugar prices, while also sustaining the value of world market sugar in local currency terms in key exporting countries, such as Brazil. In addition, developments in oil prices over the last three months have emerged as a new potential driver of prices in 2015.