Rising production costs and growing ethanol use in Brazil,
combined with policy-induced production swings across Asian countries,
are the main sources of higher and more-volatile sugar prices.
By Michael McConnell, Erik Dohlman & Stephen Haley*
World sugar prices soared to a 29-year high of nearly 30 cents a pound in early 2010 before falling back to half that level by early summer.** Still, they remain 50% higher than average over the past 20 years. Was this price spike a temporary oscillation caused by a supply shock, or does it reflect a more permanent fundamental shift in global market dynamics?
Editor & General Manager of The Sugarbeet Grower