Sugar is derived from two plant sources, sugar cane and sugar beet. Sugar cane is the main source of sugar in tropical climates and sugar beet in temperate and mild climates. The sugar derived from both these sources is 99.8% pure sucrose, a complex sugar composed of glucose and fructose. Today, sugar is produced by over 120 countries around the world for both domestic and international use.
The primary source of sugar is sugar cane which account for 78% of the market. Brazil is the largest producer with over 30 million tonnes per year, followed closely by India with over 27 million tonnes and the EU running third with 17 million tonnes per year. Brazil’s production account for 20% of the world’s total sugar supply.
The sugar industry is unique compared to other commodity markets because as much as 70-80% of the sugar produced in each country is consumed by that country. This has led to a market rife with subsidies and unfair market pricing.
Factors that can influence the price of sugar are:
- The demand for alternative sources due to concern about diabetes, obesity and tooth decay.
- The EU is the second largest exporter of sugar so any shift in policy around subsidies and tariffs will have an impact on price.
- Weather is another factor. Beets which are grown in temperate climates like Japan can be exposed to frost etc.
- High tariffs in some countries have led to switching to alternative sources like corn syrup.
Sugar (SGR) Contract Details:
| Currency | Price per | Standard Contract Size | Pip Value / contract |
|---|---|---|---|
| USD cents | Pound | 112,000 Pounds | 11.20 USD cents |
Trading hours: Cotton trades daily Monday to Friday from 08:30 GMT and closes at 17:55 GMT. Spreads are usually higher during out-of-business hours.
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