The price of sugar is driven by many factors: (1)
1) Oil prices and the demand for ethanol, since sugar is believed to be an efficient source for ethanol production, impact the global price of sugar.
2) Government regulations
- Governments subsidize sugar manufacturers allowing them to place cut-rate sugar into the market.
- The United States has attempted to raise prices on sugar in the country by import restrictions.
3) US farmers have more control
- Cooperatives have formed giving farmers complete control of processing facilities. This reduces some costs and gives US farmers more control of the price of sugar.
4) Awareness of health effects from sugar
- Public health concerns about obesity can decrease the demand for sugar.
5) When more people can afford sugary food, the demand will increase.
(1)”Sugar Industry.” EDIS. Sugarcane Economics and Policy (Sugarcane Handbook). Web. 19 Apr. 2012. <http://edis.ifas.ufl.edu/topic_sugar_industry>.