Sunday, October 30, 2005

Trends in global sugar consumption

The world-wide sugar market has entered a time of structural change. Since the beginning of the current year, the international sugar prices have been on the increase. The European sugar reforms would have an impact on the prices because they might disappear as a major white sugar exporter later on in the future. Also, ethanol may create a permanently tighter supply of sugar because the level of crude oil, given the ongoing concentration process of the supply side and Brazil’s growing dominance. The greater the weight on Brazil, the more problems with food security. India, Thailand, Cuba, and other raw sugar producing countries have had series of droughts which resulted in scarcity of sugar. If supply greatly decreased in 2005/2006, then this would cause a price increase and could permanently affect the global sugar prices.
The consumption of sugar has decreased but is expected to grow. What are some factors that could have affected the consumption of sugar? Could we blame the substitutes for sugar or the health related problems? How are the increasing prices affecting demand?

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