Sugar: The worst performing commodity of 2018 to date
A reduced demand for sugar worldwide, combined with increased production, has made the commodity the worst performing on the market for 2018.
Consumption of sugar is still rising globally – by 1.4%, on average, over the past number of years. However, demand has reduced in recent years as more and more consumers turn away from sugar.
Demand decreasing; production increasing
As demand decreases, production is increasing. Sugar production is set to reach a record high this season, which will add to world stockpiles for next season.
India follows in second place. This year the country is expected to produce 32 million tonnes of sugar, an increase of 58% on last year’s production.
The price of sugar on the New York Futures Exchange market has decreased by 25% in 2018 so far. However, weather may still have a part to play. Some of the Brazilian crop has been affected by dry weather and yield may decrease as a result.
Approximately 80% of the world’s sugar comes from sugar cane, while the remaining 20% comes from sugar beet.
Sugar beet is mainly confined to north-western Europe, while cane sugar is produced in Asia, North and South America and Australia.
In 2016/2017, almost 174 million tonnes of sugar was produced globally. The 2017/2018 season is expected to see almost 192 million tonnes of sugar produced.