eToro analyst: Droughts, energy prices and tax system changes are some of the factors which have made sugar prices reaching their highest levels in six years
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As you sugar and other commodities prices remain in focus globally. At FXMAG we'vepaid special attention to sugar prices. On our request, Pawel Majtkowski, Market Analyst at eToro talks the current situation on the market.
Pawel Majtkowski (eToro): Sugar is the best performing commodity this year (+16%) and the most important "sweetener" added to food and beverages. Its price is rising both on the global market and in Poland. According to GUS data, the retail price of sugar (at the end of February this year) was 85% higher than a year earlier.
The world sugar market is large (200 million tons), but at the same time low in value (at $460/ton).
Pawel Majtkowski (eToro): The world sugar market is large (200 million tons), but at the same time low in value (at $460/ton). Sugar prices recently reached their highest levels in six years. This is the result of several factors, reducing global supply. India, the world’s second largest producer, has seen drought-driven production shortfalls and export quota cuts. In Europe, including Poland, sugar beet production has been hit by high energy prices. And in Brazil, which is the largest sugar producer, high oil prices, combined with changes in the tax system, are stimulating the production of bioethanol from sugar cane, at the expense of sugar production. And at the same time, renewed demand is boosting consumption in the U.S. and Asia, keeping prices rising.
