News Sugar
Will the sugar price increase continue?
The International Sugar Organization (ISO) has calculated that there will be a shortage of 2020 million tons for the 2021/3,5 sugar season. That is about 2% of global consumption. The price of sugar has risen in recent months. Will the price increase of sugar continue in the near future?
Casper Burgering, economist at ABN Amro expects so. The expected shortage is a reason for speculators to build positions in sugar.
In Europe and America, the demand for sugar has been declining sharply for years. Sugar fits less well in a healthy diet and more and more attention is being paid to this in these regions. Global demand continues to grow at around 1% per year. With a growth of 1,2%, Asia is just above the average. In the Middle East and Africa, demand is even increasing by 2,5% per year.
Price increased considerably
At the beginning of 2020, the sugar price has fallen sharply. The low point was reached on April 27. After that, the price recovered and increased by 57% for the rest of the year. The price increase has not stopped in 2021 either. From January 1 to mid-February, the price has increased by 7%.
Burgering believes that the price is still relatively low. The supply on the market is tight, partly due to logistical problems and a shortage of containers. This shortage will not change in the short term. The Brazilian real is also expected to rise further. Taking all these factors into account, a further price increase is obvious.
Jurphaas Lugtenburg
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