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Sugar

General Characteristics 

 - Sugar is an important global trading commodity. In countries with a moderate climate, especially Western, Central and Eastern Europe, as well as the United States, China and Japan, sugar is produced from sugar beets, whereas in tropical and subtropical areas it is extracted from sugar cane. The most important sugar producing countries are: India, Brazil, Thailand, China, Australia, Mexico, Cuba and the United States. In total, sugar is produced in 113 countries around the world. Seventy-one countries produce sugar from sugar cane, thirty-five only from sugar beets, and seven from both plants.
 - Sugar is a broad term applied to a large number of carbohydrates present in many plants and characterized by a more or less sweet taste. The primary sugar, glucose, is a product of photosynthesis and occurs in all green plants. In most plants, the sugars occur as a mixture that cannot readily be separated into the components. In the sap of some plants, the sugar mixtures are condensed into syrup. Juices of sugarcane (Saccharum officinarum) and sugar beet (Beta vulgaris) are rich in pure sucrose, although beet sugar is generally much less sweet than cane sugar. These two sugar crops are the main sources of commercial sucrose.
 - The sugarcane is a thick, tall, perennial grass that flourishes in tropical or subtropical regions. Sugar synthesized in the leaves is used as a source of energy for growth or is sent to the stalks for storage. It is the sweet sap in the stalks that is the source of sugar as we know it. The reed accumulates sugar to about 15 percent of its weight. 
 - The sugar beet is a beetroot variety with the highest sugar content, for which it is specifically cultivated. While typically white both inside and out, some beet varieties have black or yellow skins. 
 - Other sugar crops include sweet sorghum, sugar maple, honey, and corn sugar. The types of sugar used today are white sugar (fully refined sugar), composed of clear, colorless or crystal fragments; or brown sugar, which is less fully refined and contains a greater amount of treacle residue, from which it obtains its color.

Sugar cane fields




Sugar beet fields




Global market

 - Global sugar production is projected to increase by 1.9% p.a. and to reach nearly 216 Mt by 2023, an increase of around 36 Mt. Most of the increase in production will originate from countries producing sugarcane rather than sugar beet, and is attributed to higher yields rather than area expansion, even though yields will continue to flatten in the short term. Global sugar consumption is projected to increase by 1.9% p.a., much slower than in the previous decade, and will reach 211 Mt in 2023. Growth in consumption of sugar will continue to be dominated by the sugar deficit regions of Asia and Africa. 
 - World sugar prices are expected to continue to be volatile but will edge moderately upward on the back of rising costs of production. Prices will remain attractive enough to enhance new investments in production capacity, notably in some exporting countries facing world market prices. Brazil’s cost of production and the allocation of its large sugarcane crop between sugar and ethanol production remains a key determinant of world sugar prices. World sugar prices are expected to remain on a raised plateau and to average higher, but to continue to decline in real terms. 
 - Production and consumption of high fructose corn syrup (HFCS), or isoglucose, is projected to grow by around 28 and 29%, respectively, to 2023. The United States remains the leading producer, but the European Union will be responsible for a large share of the additional production in the coming decade, following the abolition of production quotas in 2017. Production will also grow in China and to a lesser extent in Mexico. These countries will also be the leading consumers. Imports and consumption of HFCS is expected to grow further in Mexico as well, as part of two way trade in sugar and HFCS with the United States in an integrated sweetener market under the North American Free Trade Agreement (NAFTA).        


World sugar production, beet and cane comparison 2011



The world's top producers: Sugar Cane



Major sugar producing countries



Major sugar exporting countries



Major importing countries



Factors that influence sugar price

 - The key health concerns of sugar consumption are diabetes, obesity and tooth decay. Industrialized nations have made it a priority to solve these health problems, and may require the continued substitution of sugar or its elimination altogether. 
 - The European Union is the second largest sugar exporter in the world. Sugar is subsidized in many regions, including the EU, through production and high tariffs on imports. Any shift in policy could topple this disparate plan.  
 - Weather plays a key factor for both sugar cane and sugar beets. Sugar cane thrives in warmer tropical climates, while sugar beets prefer cooler climates such as Japan. Although sugar beets are consistently used as an alternative source for sugar production, frost damage and the lack of processing capacity can play a significant role in determining their availability.     
 - Like all sugar producing countries, the U.S. has a protectionist policy in place for sugar prices. While producers enjoy higher sugar prices, it forces consumers to look to alternatives, a situation that has led to a significant number of companies switching to corn syrup. A growing movement among sugar cane and sugar beet producers is demanding a free market for sugar production.      


World Sugar Trade


 
World sugar market indicators


International sugar prices



Wholesale refined sugar prices U.S. vs World



Consumption

 - World sugar consumption is set to grow by about 2 percent in 2013/14, sustained by increases in several developing countries that will benefit from falling domestic prices. Despite its modest growth, global sugar production is anticipated to surpass consumption for the fourth consecutive year, with the surplus expected to hover around 4.7 million tonnes, resulting in a further build up of stocks. 


World beet and cane sugar production 1952/53-2011/2012 



Brazilian sugar cane production and allocation




Conclusion:

 - Global sugar production for 2014/2015 is estimated down 2.6 million metric tons (raw value)  at 172,5 million on reductions in Brazil, Thailand and China. Global imports are expected to remain flat while consumption  is projected to reach a record 171.0 million tons. 


Global sugar consumption expands while production decelerates