Supply

Due to the fact that sugar cane grows easily, sugar cane has been produced the most throughout history. Only, at the beginning of the twentieth century sugar cane production was second after beet-sugar production. Nowadays, sugar cane is the most produced again. “Total combined production [sugar cane and beet-sugar] reached 100 million metric tons raw value in the mid-80’s and rose to 120 million metric tons raw value by the mid-90’s.” This was based on a increase in demand of “2% a year” because of population growth and the improvement of living standards around the world (1). Since the beginning of the twenty-first century, Brazil has remained as the largest producer of sugarcane, while The European Union remains as the largest producer of Beet-sugar. In general, the production of sugarcane is larger than the production of cane sugar.

The graph shows the supply and demand for sugar in some countries around 2003-2003. From: "Sugarbeet vs. Sugarcane." Agrocourier.com. Web. 21 Mar. 2012. <http://www.bayercropscience.com/BAYER/CropScience/cscms.nsf/id/Sugarbeet_Agro?Open&gt;.

Production of sugar has increased due to a reduction in the cost of production and an increase in demand for sugar. The top 10 Sugar Producers of sugar between the period of 2009-10 are as follows:

Ranking

Country

Metric tons sugar

Type

1.

Brazil

36,500,000

Cane

2.

India

[24,700,000]

Cane

3.

China

11,300,000

Cane

4.

Thailand

7,600,000

Cane

5.

Mexico

4,950,000

Cane

6.

France
Australia

4,700,000
4,700,000

Beet
Cane

7.

Germany

4,575,000

Beet

8.

USA

4,151,000

Beet

9.

Russia

3,570,000

Beet

10.

Turkey

2,700,000

Beet

The table above shows the main producers of sugar during 2009 and 2010. Table from: “About Sugar.” Sugar Nutrition UK. Web. 20 Feb. 2012. <http://www.sugarnutrition.org.uk/the-production-of-sugar.asp

At the beginning of the twenty-first century India was the world’s largest producer of cane sugar. Its production of centrifugal sugar reached 16 million mtrv. However, most of its sugar is consumed in the country since demand is high. “Only rarely, after exceptionally good harvest, are small quantities exported.” Brazil was second in production but it was increasing rapidly. Its production reached 13 millions mtrv. Brazil is a country rich in conditions to produce sugar; it has abundant land and good climate. However, not all the sugar can produced is destined to produce sugar; some is destined to produce fuel for cars. Whether sugar cane is used for fuel or sugar depends on the world price. Brazil decides to produce whatever gives the largest economic profit; they make rational choices! Their Marginal Benefit is greater than their Marginal Cost or at least they try to make it happen. Cuba was the third largest producer.  It had reached 8 million mtrv of sugar in 1980, but production went down when communism fell in Eastern Europe. Thailand was fourth with 6 million mtrv. As a highlight, only 1/3 of its production were consumed in the country; 2/3 were exported. The European Union controlled “half of the world’s beet sugar.” That corresponded to 18 million mtrv per year. The main producers were Germany and France, followed by Ukraine and Poland. However, the industry was suffering a scarcity on machinery, technology, and management because land was still publicly owned in some regions. Additionally, Western European companies have bought factories and began modernization. Other major beet producers are The USA, China, and Turkey. Since The USA has a “wide range of climatic zones,” it is able to produce cane and beet sugar.(1)

In 2010, the picture was a little bit different. Brazil was the leader and India was second in world sugar production.”Brazil, India, Thailand, and China accounted for 53% of 2010/2011 forecast world production (2).”

BRAZIL: Brazil total sugarcane production from May 2009 until April 2010 was estimated around 603 million tons. This is a result of the extension of the harvest period. Even though rainfall limited the harvest process, mills were able to elongate the crushing process for months. It is estimated that “roughly 50 millions of sugarcane were left in the fields” due to climate challenges. Despite the challenges, Brazil remained the leader in production of sugar. Additionally, sugarcane production is estimated to be at 660 million tons. The Center South region is expected to have a 10% increase from last season due to the large amount of cane that was left in the field last season, favorable weather conditions, and usage of new mills. Due to an incentive created by the high prices of sugar and ethanol and the help of the weather, sugar crushing began in February. Brazil is expected to have an increase in the use of land; it is expected to be using 8.95 million hectares, which represents a 3% increase from last season (2).

INDIA: The cycle of sugar production in India lasts from 6-8 years. It is normally divided in two parts. First, there is a time period from 3-4 years when there is a high production of sugar. Then, there is a time period from 2-3 years when there is a low production of sugar. An example of it occurred from 2007-2009 when production fell down and then surged back up again in the period from 2009-2010. It is expected to keep soaring in the 2011 year. India’s sugar production was expected to be 24.7 million tons in 2010, which was an increase from the last year production due to an increase in the amount of cane that was planted. Strong cane process and competition with other crops make sugar more profitable than other crops so people start investing more in it. In general, “2009/[20]10 centrifugal sugar production [was] raised to 19.5 million tons, against the earlier estimate of 17.3 million tons” (2).

India's sugar production

The graph shows the trend in production according to the life cycle of sugar in India. It also shows that sugarcane is not used solely in the production of sugar.
From: 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

CHINA: Sugarcane production in China for the period between 2010/2011 was at 1.85 million hectares. During the period between 2009/10, there was a rise of 40% on the price of sugar as a result of a decrease in domestic sugar supply. An expected shortage on sugar represented an increase in the price paid to growers. “During crushing season, beginning November 2009, mills were concerned by the short supply of cane due to drought damage. To encourage the expansion of the sugar cane area or competing for sourcing more cane sugar, the sugar mills in Guangxi raised the cane price by 18 percent during the late stages of 2009/2010 in comparison to the previous year.” However, the purchase price was not affected from 2008-2010 due to a record production of sugar in 2007. Sugar is a main source of income for “interior, less economic prosperous provinces.” It is synonym of revenue and stability for farmers. Since sugarcane is more resistant to droughts than grains or tubers, farmers choose to plant it. Governments earn from the taxes imposed on sugar mills but not on farmers so they encourage farmers to grow more sugarcane. Additionally, the government regulates the price of sugarcane to protect the farmer. It makes the “price less volatile than other crops.” Sugarcane in China is a good choice for farmers because some of them cannot afford transportation (2).

THAILAND: During the period between 2009-2010 sugarcane production was lower than it was expected due to drier weather conditions. 69 million tons of sugarcane were produced. It was a larger amount than the one produced in previous years because of the expansion of plantation zones. However, the dry season had an impact on the content of sugar and went down by 7.0% from the year before. For the period between 2010-2011 sugar production was supposed to increase by 3.0%. It recovered 7.2 million tons from the previous year. Additionally, sugarcane seeds are scarce in Thailand. (2)

WORLD PRODUCTION OF SUGAR: During the time period between 2009 and 2010 sugar production kept soaring. In the table above, you can find the supply of sugar according to different regions and the total production of sugar based on the plant it was extracted from (3).

Region

Metric Tons

Europe

27,420,000

Asia

48,637,000

Central America

11,552,000

Africa

10,613,000

North America

7,229,000

Central America

11,552,000

South America

44,463,000

Oceania

4,940,000

World Total (Beet & Cane)

154,854,000

World Total (Beet)

35,138,000

World Total (Cane)

119,716,000

Table from: “About Sugar.” Sugar Nutrition UK. Web. 20 Feb. 2012. <http://www.sugarnutrition.org.uk/the-production-of-sugar.asp


Works used:

(1) “The Cambridge World History of Food – Sugar.” The Cambridge World History of Food. Cambridge. Web. 21 Feb. 2012. <http://www.cambridge.org/us/books/kiple/sugar.htm&gt;.

(2) 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;.

(3) “Production of Sugar.” Sugar Nutrition UK. Web. 21 Mar. 2012. <http://www.sugarnutrition.org.uk/the-production-of-sugar.aspx&gt;.

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