Sugar surge
As prices for the sweet stuff flirts with 30-year highs, Tavia Grant offers a look at the world of sugar
Why the price is up. Countries such as Egypt and Indonesia are consuming more. Too much rain in Brazil, the world’s largest producer. Not enough rain in India, causing the world’s No. 2 supplier to import sugar. (Photo: Indonesian workers unload imported sugar from a truck in Semarang)KIDUNG PELANGI/AFP / Getty Images
Sugar grows best in tropical climates with heavy seasonal rain in a warm growing season, followed by a dry period for ripening.NELSON ALMEIDA/AFP / Getty Images
The market. Eighty per cent of sugar is consumed in the country where it is produced, the American Sugar Alliance says. Some strategists say sugar prices will swell further. But as Edward Makin, CEO of Rogers Income Fund says, "Any time we've had bull markets in the past, the farmers of the world tend to respond accordingly. Then you get mass overproduction which forces prices down pretty dramatically."MUSTAFA QURAISHI/The Associated Press
Demand for sugar is also driven by the biofuel market. Sugar cane can be turned into alcohol-based fuel, ethanol. This is used as a gasoline additive or replacement. World ethanol production is expected to grow 12 per cent this year, the International Sugar Organization predicts. An ethanol boom is sweeping through the corporate world. Royal Dutch Shell PLC recently teamed up with Brazil’s COSAN to create a $21-billion-a-year ethanol joint venture, the biggest investment in the country’s ethanol industry so far.Mark Wilson/Getty Images
What about chocolate? "Grocery shoppers shouldn’t worry too much about the recent trend...To put this in perspective, there’s only about 2 cents' worth of sugar in a 99-cent chocolate bar," says Phillip Hayes, American Sugar Alliance. "We don't see any fundamental signs of relaxation of cocoa prices ... Sugar prices are also trending upwards. There are enormous price pressures," Swiss chocolate maker Barry Callebaut Juergen Steineman said this month, adding that spiralling cocoa and sugar prices would lead to price hikes at good groups.SANG TAN
Mill manager Josh Wheeler examines a pile of processed potash at the Mosaic Potash Colonsay mineDAVID STOBBE
Biggest producers, biggest consumers
Seventy per cent of global sucrose is derived from sugar cane (grown in hot-weather countries). The rest is derived from sugar beets (grown in cooler-weather countries).Andre Penner
Alberta’s Taber area has produced the largest share of the country’s beet sugar since 1951. In recent years, Ontario farmers have started to grow more sugar beets. In most parts of Canada, it is still cheaper to buy imported raw sugar than to produce it. Ethanol could eventually lift fortunes for Canada’s beet sugar industry as rising energy prices are spurring demand for ethanol. Ethanol can also be made from sugar beets.DON SEABROOK
Canada is the ninth-largest sugar importer in the world. Ninety per cent of sugar in Canada comes from cane, most of which is refined from raw cane sugar imported from South and Central America, Australia and the Caribbean.Heidi Kristensen/Getty Images/iStockphoto