Economy

An income will rise only as long as the customer’s needs are the primary focus of the industry.

 

From 1990-1998, the prices for raw sugar remained about 10 cents per pound (c/lb) but diminished to about 7.32 c/lb in 1999. (1)

Brazil, with its high quality products, and low cost of production, changed the free marketing purchasing and world market production. Production Cost in the Centre-South could reach 5 c/lb, but still a range of costs exist. To expand its revenue base, Brazil supplies ethanol (~50% of cane), domestic sugar (~25%), and export sugar (25%) markets and also instituting electricity. (1)

Exporting 80-85% of raw sugar production, Australia is the number one most exposed. The domestic protection was discarded in 1997 in Australia. This allowed the Australian producers to have product diverseness, trade reform, and/ or reduced costs.  Other producers usually have many domestic rules with price protection. These producers either have access to European Union or United states markets or they don’t. Australia can successfully compete because of its lower-value dollar. Raw sugar producers like Africa, Guatemala, and Thailand, similar to Australia, are also getting pounded by Brazil’s exploding sugar industry. (1)

Approximately 75 countries export sugar and 130 import it. Many of these countries trade in small amounts (some as minimal as trading 10,000 tons a year), but the European Union, Brazil, Thailand, and Australia export more than 1 million mtrv annually. On the contrast,  The European Union, United States, Japan, South Korea, and Canada import more than 1 million mtrv apiece. (2)

The European Union is a major importer (1.8 million mtrv annually) and exporter (5 million mtrv annually) of sugar due to its beet production. Many countries like Barbados and Jamaica import sugar at a world market price for their own consumption, but export it at a price that will meet contracted arrangements with the European Union and United States. The United States practices tolling; this is when refineries import raw sugar and turn it around to export again. Tolling permits surplus refining capacity and provides employment even though quotas limit imports. (2)

Works Used:

(1) “Sugar and Sweeteners: Recommended Data.” ERS/USDA Briefing Room -. 19 Apr. 2012 <http://www.ers.usda.gov/Briefing/Sugar/data.htm&gt;.

(2)“The Cambridge World History of Food – Sugar.” The Cambridge World History of Food. Web. 19 Mar. 2012. <http://www.cambridge.org/us/books/kiple/sugar.htm&gt;.


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