It’s All about Sugar as Prices Surge and Supply Fears Grow

Asia, Brazil, Business News/Analysis, China, European Union (EU), Field/Orchard/Plantation Crops/Residues, India, Opinions, Pakistan, Policy, Russia

September 8, 2011

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by Joelle Brink (Biofuels Digest Asia) …We imagine “food vs fuel” in terms of grain shortages, but where food and fuel actually collide is on the global sugar markets. “While sugar is widely available in the west and its price is rarely considered, it is an essential source of cheap calories in emerging economies where surging sugar prices are driving food inflation,” writes Jack Farchy in Britain’s Financial Times.

This year Brazil, normally the world’s top sugar producer, had a sugar cane harvest significantly below normal, with scarcity pushing the price of sugar up 85 percent to a 30-year high. High prices in turn led millers to switch away from ethanol and toward table sugar, pushing up prices at the pump just as policy makers struggled to control inflation.

…Normally at least some of the global shortage would be offset by harvests from other important growing areas like Russia and Europe, but this year their production too has been lower than normal. That leaves India, the world’s second largest sugar producer, which by most indications will have one of its largest harvests in recent years. That’s the good news.

The bad news is that this year India may not have enough surplus to meet global demand. READ MORE and MORE (Investors Business Daily)

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