Sugar price spikes will continue to worry importers

Subject

Sugar market dynamics.

Significance

There were protests in Egypt in October and November after the price of sugar doubled this year from a low of around 10 cents per pound in 2015. The sugar price swings much more widely than any other commodity traded frequently on world markets. Latin America consumes the most sugar per capita but also produces the most. The Middle East and North Africa (MENA) produce little, but imports the most per capita, leaving the region vulnerable.

Impacts

• Higher taxes may reduce demand for sugar for processed food and drinks but demand for use in renewable energy will likely remain high.
• China is the world's largest sugar importer and its policies have a large influence on sugar prices.
• NAFTA encouraged Mexico to raise its sugar output but Donald Trump's election has raised doubts over the agreement's future.