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Register for the Sugar Report
View a sample Sugar Report
Sucden Financial's Sugar Desk offers a comprehensive service to institutional/corporate clients as well as traders and producers, providing information on the main sugar futures markets.
Our Offering:
- Comprehensive Service: Our Sugar Desk offers a comprehensive service to institutional and corporate clients as well as traders and producers, providing information on the main sugar futures markets.
- Market Information: Our dedicated team of brokers offers views, disseminate market information and trading flows and provide daily written reports on market activity.
- Experience and Language Skills: Sucden Financial’s Sugar team combines a wealth of industry as well as futures trading experience with an extensive range of language skills. Our Sugar team is able to provide a service in Spanish, Portuguese, French and Russian, which underlines our commitment to serve clients globally.
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Sugar trading
Approximately 30% of the sugar produced is traded on the world markets. Much of this is traded by private trading companies, sometimes through sugar brokers. However, a significant tonnage is traded through inter-governmental or preferential agreements, or is controlled to some extent by government or industry bodies. As with most commodities, the trend is towards a greater liberalisation of trade, though the sensitivity of sugar as a commodity leaves it in a fairly unique position.
Futures trading
There are two main futures markets for Sugar:
• NYSE Liffe lists the No. 5 White Sugar future
contract.
• ICE Futures U.S. lists the No. 11 Raw Sugar
future contract.
To view contract specifications
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Background to the Sugar Market
History and origins
Sugar was first mentioned in Chinese historical records in 327BC, but its cultivation and usage really spread after the first cane plant was introduced to the Americas in 1642. Today, sugar is produced, consumed and traded in just about every country in the world. As a staple food and basic source of calorific energy, sugar is one of the most politically sensitive commodities. Sugar is produced from both sugar cane and sugar beet. Sugar beet was first cultivated in 1747, but two major events really accelerated its cultivation. The Napoleonic wars in the early 1800s meant that supplies of cane sugar to Europe were restricted. This, coupled with the abolition of slavery in the late 1800s meant that production costs of cane sugar rose quite remarkably. Nowadays, starch sweeteners produced from corn and wheat, (e.g. HFCS - High Fructose Corn Syrup) and high intensity sweeteners (e.g. Aspartame) compete with sugar in the sweetener market.
Production
Sugar is produced in approximately 110 different countries, with cane sugar production flourishing in mainly tropical climates (Latin America, Asia, and Australia), whereas beet sugar benefits from colder climates (Europe, North America, China). A few countries grow both beet and cane in different regions, e.g. USA and China. Cane sugar contributes to approximately 65% of total production with its harvesting season being predominantly in the dry months (April to December in the Northern Hemisphere, November to July in the Southern Hemisphere). Beet sugar is harvested from September or October through to December. The main influences on production are climate, government policies, costs of production, and availability of competing products.
Consumption
The majority of sugar produced is consumed in the country of origin, with about 30% exported. The largest total consumers of sugar are India, the European Union, the former Soviet Union, Brazil, the USA and China. Average per capita consumption is 20.4 kg, a figure which has not altered significantly over the last 20 years or so. Sugar consumption is fairly inelastic in developed countries where price changes do not dramatically alter the level of consumption. In developing countries consumption tends to rise and fall in line with levels of income. |
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