Demand

The consumption of sugar has raised at a 2.5% rate per year over ten years. This is due to various factors such as:

  • Population growth
  • Variation on consumers’ incomes
  • Price of related goods (sweeteners)
  • Demand for low-calorie sweeteners.

A general observation and concern about world sugar consumption is that “per person consumption of sugar is declining in developed countries, but increasing in developing countries” (1).

The high demand for sugar around the globe has led to an increase in the production of sugar. However, since sugar sources are being used as energy sources, it is expected that global shortages will occur. Unless countries like Brazil reduce the amount of sugar cane used in the production of ethanol and fuels, the world will experience shortages due to weather changes and the scarcity of land and technology (2).

Even though Brazil is the largest producer of sugar, it is not the largest consumer. On the other hand, India produces sugar mostly for consumption. The table below shows the change in the demand of centrifugal sugar for the largest consumers in the world.

Country 2007/2008 2008/2009 2009/2010 2010/2011 May 2011/2012 Nov 2011/2012
India 23,200 24,500 23,000 23,000 26,500 25,000
EU 16,496 16,760 17,400 17,500 17,500 17,600
China 14,250 14,500 14,300 14,000 13,600 14,300
Brazil 11,400 11,650 11,800 12,000 12,550 11,500
USA 9,590 9,473 9,861 10,042 10,093 10,183
Russia 5,990 5500 5,700 5,925 6,010 6,230
Indonesia 4,400 4500 4,700 5,000 5,200 5,200
Pakistan 4,100 4175 4,100 4,250 4,300 4,300
Mexico 4,728 4929 4,615 4,171 4,460 4,253
Egypt 2,690 2748 2,629 2,800 2,850 2,850
Other 55,193 54982 56,548 57,392 58,211 57,904
Total 152037 153717 154653 156080 161274 159,320

Data from: USDA- “Sugar, World Markets and Trade.” Web. <<http://www.usda.gov/wps/portal/usda/usdahome?q=sugar+world+production+supply+and+distribution&x=0&y=0&navid=SEARCH&Go_button.x=21&Go_button.y=11&site=usda>&gt;.

As we can see, the demand for sugar has been increasing during the past years. Production has also been increasing. The following table shows the changes in production of centrifugal sugar for the largest producers of sugar.

Country 2007/2008 2008/2009 2009/2010 2010/2011 May 2011/2012 Nov 2011/12
Brazil 31,600 31,850 36,400 38,350 39,600 35,750
India 28,630 15,950 20,637 26,650 28,300 28,300
EU 15,614 14,014 16,687 15,090 15,300 16,740
China 15,898 13,317 11,429 11,199 12,000 11,840
Thailand 7,820 7,200 6,930 9,663 9,700 10,170
USA 7,396 6,833 7,224 7,110 7,430 7,153
Mexico 5,852 5,260 5,115 5,495 5,650 5,650
Russia 3,200 3,481 3,444 2,996 4,175 4,800
Pakistan 4,163 3,512 3,420 3,920 3,820 4,220
Australia 4,939 4,814 4,700 3,700 4,000 4,150
Other 38,424 37,913 37,701 37,264 38,507 39,474
Total 163536 144144 153687 161437 168482 168247

Data from: USDA- “Sugar, World Markets and Trade.” Web. <<http://www.usda.gov/wps/portal/usda/usdahome?q=sugar+world+production+supply+and+distribution&x=0&y=0&navid=SEARCH&Go_button.x=21&Go_button.y=11&site=usda>&gt;.

The data from this table shows the supply schedule for centrifugal sugar over the past years. Brazil remains at the top of the list, followed by India and China. (For further information about production take a look on the Supply tab under Economy)

Not all the sugar that is produced in a country is supposed to be consumed in the same country. Over the past few years, there has been mostly a surplus on the production of centrifugal sugar. As shown in the graph below, demand for sugar has been lower than its supply. However, overall, both of them increased. The supply of sugar fell during 2008/2009 due to unexpected weather conditions. Similarly, the demand of sugar fell on November 2011/2012 due to an increasing awareness of the issues of sugar on health and because the Indian growers decided to stop selling huge amounts of sugar to India and start exporting. It is a result of a the high price of sugar in some parts of the world. There was a shortage of sugar of 10,539 tons during the period between 2008-2010 mostly due to the economic recession that hit the world and the change in the price of commodities. Since inputs were harder to get, prices decreased the supply schedules of sugar and generated a shortage. All this information can be inferred from the graph below.

 

Works used:

(1)”Australian Commodities: March Quarter 2011.” Australian Government; Department of Agriculture, Fisher and Forestry. Web. 21 Feb. 2012. <http://adl.brs.gov.au/anrdl/metadata_files/pe_abares99001790_12a.xml&gt;.

(2) Stock Market. “Recommendations.” Balrampur Chini Mills Review and Analysis by Angel Broking. Web. 21 Apr. 2012. <http://www.stockmarketsreview.com/recommendations/balrampur_chini_mills_review_and_analysis_by_angel_broking_20100306_3320/&gt;.

(3) USDA. “World Production, Supply, and Distribution.” United States Department of Agriculture. Web. 20 Mar. 2012. <http://www.usda.gov/wps/portal/usda/usdahome?q=sugar+world+production+supply+and+distribution&x=0&y=0&navid=SEARCH&Go_button.x=21&Go_button.y=11&site=usda&gt;.

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