Sugar is a major food commodity. It is widely consumed around the globe. Some industries just cannot exist without it. On top of that, it is included in the list of strategic commodities important for a country’s food security.
In this article will take a look at sugar prices worldwide and will ponder on the near-term future of the global sugar market. Masterforex-V Academy will help us with that.
Sugar Prices Worldwide
The following chart represents a comparative table of sugar prices around the globe:
As we can see, Canada, Japan, Sweden , Austria and Germany rare the countries with the highest sugar prices on the planet. Russia can boast lower prices than in the USA and Western Europe. China is the country with the lowest sugar price. It is $0,84 per kilo.
What Factors Determine Sugar Prices?
There are 2 key factors that determine sugar prices worldwide.
1. Weather and economic conditions in major sugar-growing and sugar-exporting countries.
2. The price of sugar futures contracts, which determines the supply/demand balance worldwide.
Since early 2012, sugar prices have been declining slowly along with the prices on other food commodities. The decline was mainly caused by higher sugar production worldwide.
In late May 2013, China announced substantial purchases of sugar in order to increase the domestic stocks of sugar. Sugar futures declined after that. The Chinese authorities are planning to purchase 300 000 tons of domestic sugar. In 2012, China become the world’s biggest sugar importer after buying and importing 4,19 million tons of the sweet commodity.
Experts Anticipate Further Decline
In early June 2012, most experts warned sugar producers that they may see hard times since the price on their product will continue declining in the near future. At this point, sugar has lost almost 50% of this record-breaking value in 2011. One of the major reasons for that is the forecast for the 2013-2014 marketing year. In particular, experts anticipate overproduction and oversupply.
In particular, the global production of sugar will reach 183,6 million tons during the reporting period, experts say. At the same time, the global consumption of sugar is expected to grow by 2% up to 177,9 million tons.
Still, due to abundant harvests of sugarcane and sugar beet worldwide, we may well expect higher production, which will eventually exert extra pressure on sugar prices.
The chart below, courtesy of Masterforex-V Academy, reflects the current state of affairs in the market of sugar:
