Ihe white powder transmuted into gold… The market alchemists have struck again. Capable of blowing out the smallest smoke, they ignited the sugar exchanges. In New York, a pound of raw sugar is currently trading at nearly 26 cents. And in London, you have to pay more than 700 dollars (644 euros) to afford a ton of white sugar. Price levels that had not been reached for a dozen years. Sugar, the taste of lucre…
Already before Christmas, sucrose crystals were glistening, passing the 20 cents per pound mark. Since then, the rapid rise in blood sugar levels has continued on its merry way. This surge also led to a rebound in world food prices in April. The index established by the Food and Agriculture Organization of the United Nations (FAO), based on a basket of basic foodstuffs, rose by 0.6% compared to March. The reason: a 17.6% increase in the price of sugar over this period. Even as wheat and oil prices continued to decline.
Sugar therefore sails against the current of other agricultural raw materials. To explain this singularity, François Thaury, director of the sugar market at Agritel, evokes “the rush of buyers on the markets for a month and a half. Buyers who felt prices had downside potential and had neglected their hedging a bit.” It also evokes the evolution of the estimate of the world sugar balance. The expected surplus, estimated at 4 or 5 million tons, melted like white powder in the sun.
El Niño spectrum
Speculators are also anticipating bad news about future harvests. However, the specter of El Niño hovers again in the forecast bulletins and obscures the horizon. This meteorological phenomenon causes the waters of the Pacific to overheat and can lead to drought in India and Thailand and heavy rains in Brazil. A bad film for cane sugar. But the script is not written yet.
In the meantime, the new harvest has started in Brazil. A priori, without too much concern in this country. “Production is expected at 38, or even 40, million tonnes against 35 million tonnes during the previous campaign”, specifies Mr. Thaury. Pelé’s homeland thus hopes to once again become world champion of sugar producers and regain its crown, once stolen by India.
In France, the sugar sector continues to lose ground. In the spring, farmers sowed 380,000 hectares of beets, a further shrinkage of fields by 5%. They preferred to bet on wheat or rapeseed. However, the prices of cereals and oilseeds continue to slump. When sugar beet fetches 800 or even 1,100 euros per tonne on the European market. The Tereos and Cristal Union sugar producers have done everything to entice planters by promising very low prices, above 40 euros per tonne. A barley sugar for grain farmers…