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Breaking It Down: Let's Have a Conversation About Sugar

From Farm to Table: The Journey of Sugar and its Impact


I think sugar has more room to run and after seeing a Reuters article today I thought that we should have an in depth conversation about sugar. Summary: Due to a reduced yield in cane due to inadequate rainfall, India is anticipated to impose a ban on sugar mills from exporting sugar in the upcoming season starting in October. This marks the first such ban in seven years. The absence of India's sugar exports on the global market is likely to contribute to already high benchmark prices in New York and London, potentially causing concerns about increased inflation in global food markets.

The decision to restrict exports stems from the aim to prioritize local sugar requirements and to utilize surplus sugarcane for ethanol production, as stated by an anonymous government source. Due to this focus, there won't be enough sugar available for export quotas in the upcoming season.

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In the current season ending on September 30, India allowed mills to export only 6.1 million tonnes of sugar, a significant reduction compared to the record 11.1 million tonnes permitted in the previous season. This move follows India's imposition of a 20% tax on sugar exports in 2016 as a means to limit overseas sales. This is everything you need to know about the sugar market. Most of my subscribers have been very interested in understanding commodities lately. Let’s break it down.


Here's the information about sugar exports by different countries in 2022:

Brazil was the top exporter, sending out sugar worth $11 billion, which made up about 35.6% of the total sugar exports.

India came next, exporting sugar valued at $5.7 billion, accounting for 18.6% of the total.

Thailand was another major player, exporting sugar worth $3.1 billion, making up 9.9% of the total.

France contributed $1.2 billion in sugar exports, which was about 3.7% of the total.

Germany followed with sugar exports amounting to $890.6 million, contributing 2.9%.

Mexico's sugar exports were valued at $825.3 million, making up 2.7% of the total.

Countries like Guatemala, Morocco, and the Netherlands each contributed around 2.6% to 1.3% of the total sugar exports.

Belgium, Poland, Eswatini, South Africa, Indonesia, and Saudi Arabia each accounted for 1.1% to 0.8% of the total sugar exports.

These numbers provide an overview of the top sugar-exporting countries and their respective contributions to the global market.


Supply:

  • The supply of sugar refers to the quantity of sugar available in the market for purchase by consumers and businesses.

  • Sugar supply is influenced by factors such as weather conditions, which can affect the sugar crop yield. For example, droughts or excessive rain can impact sugar production.

  • Government policies, including subsidies, tariffs, and import/export regulations, also affect the supply of sugar.

  • Technological advancements in agriculture can increase or decrease the efficiency of sugar production, affecting the overall supply.

Demand:

  • The demand for sugar represents the desire and ability of consumers and industries to purchase and use sugar.

  • Demand for sugar is influenced by various factors, including population growth, changing dietary habits, economic conditions, and trends in the food and beverage industry.

  • For example, increased consumption of sugary beverages or processed foods can lead to higher demand for sugar.

  • Health concerns, public awareness campaigns, and government regulations can also impact sugar consumption patterns and demand. Impact of Price Changes:

    • Higher sugar prices can lead to reduced consumption as consumers may seek alternatives or reduce their overall sugar intake.

    • Conversely, lower sugar prices can encourage higher consumption.

    • Price changes can also influence producers' decisions about planting crops, investing in technology, and expanding or contracting production. Current. Holding for the moment.


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