Sugar is used in food, beverage, and in biofuel production, and its importance in global trade gives it a strong position in the commodity futures market. The price of sugar has surged 17% since the beginning of January 2021.
Reduced Brazil production
Sugar prices have recently been affected by production levels in Brazil, a key sugarcane producer and exporter. In May, Brazilian mills reportedly had to cancel sugar export contracts as they shifted to ethanol production , seeking to capitalize on high energy prices.
Brazil supplies half of the world’s sugar, producing 654.8 million tonnes of sugarcane, 41.25 million tonnes of processed sugar and 29.7 billion liters of ethanol annually.
As the Ukraine crisis triggered a global energy crisis, Brazilian farmers shifted to ethanol production. However, the US Department of Agriculture estimates that sugarcane crop in Brazil will recover 6% year over year to 613 million metric tons in the 2022-2023 marketing year.
Strong output in India and Thailand
Still, India and Thailand, which also export substantial volumes of sugar, ...
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