Posted on 07/22/2015 4:13:03 AM PDT by expat_panama
Things are not so sweet for the sugar market. Prices have been tumbling and reached a six-year low on Monday on news that Brazil's cane growers are in for a bumper harvest.
But while gold made the headlines, the dramatic fall in the sugar price was widely overlooked, despite closing down 4.4pc, compared with a 2.3pc slump in the price of bullion.
Over the past year alone, sugar prices have fallen by a quarter. So why has everything turned sour?
Bumper Harvest
Monday's sharp price drop was driven by signs that Brazil, the world's biggest producer of sugar, is on track for a larger harvest than expected.
[snip]
China increases alternatives
The price of sugar has also been impacted by a rapid increase in artificial sweetener production in China, which has flooded the market and depressed...
[snip]
The dollar
The US dollar has been growing stronger, boosted by a resurgent American economy and the prospect for a rate rise in the next few months. The US dollar index, which tracks the price of the US dollar against the world’s currencies, has increased by more than 20pc within the past year.
The value of the US dollar typically follows an inverse relationship with commodities. When the dollar strengthens against other major currencies, the prices of commodities - such as sugar - typcially drop. When the dollar weakens, commodities generally move higher.The main reason for this is because most commodities are freely traded in international markets and prices are quoted in US dollars.
Foreign buyers will purchase commodities with dollars, so, when the value of the dollar drops, they will have more buying power, and demand increases. Similarly, when the value of the dollar rises, they have less buying power and commodities become more expensive, muting demand and sending commodity prices lower.
(Excerpt) Read more at telegraph.co.uk ...
Answer: of course not. Then I couldn't drink as much. No, seriously, I couldn't finish a 24 oz bottle of Pepsi with sugar a few years back in the Caribbean. Forget about those movie cup sizes!
Good point! Plus, what about the environmental benefits from sugar cane farming in Florida? /s
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The state of Florida bought the cane farms years ago with the intention of shutting them down ,, I’m not sure of what happened to that plan but “protecting” those farms isn’t the only reason we have the sugar import duties ,,, there are only a few cane farmers ... the import duties support the corn belt farms and their corn syrup prices....
Our store brand soda has been using real cane sugar in some of their drinks for a few years now.
Prices are tumbling everywhere except where consumers buy sugar.
But most importantly, what’s this got to do with the price of my frozen orange juice futures? ;)
Eating tto much food FROM China may result in GREEN blooded Americans!
Bloomberg shows sugar at 11.42.
“I like Chinese food as do most red-blooded Americans.”
Like you I enjoy the taste of well prepared Chinese food made from good ingredients. I particularly enjoy eating real Chinese food in Honk Kong and in mainland China.
However, having done business in China for over 20 years I am very aware Chinese factories often substitute materials and cut corners. I’ve also seen Chinese fish farms up close and wouldn’t knowingly eat any farmed fish from China. Perhaps that’s why our Congress voted recently to eliminate country of origin labeling from imported and domestic food.
There have been several scandals involving poisons in pet food sourced from China. Avian flu infected chickens have entered the food supply in China from time to time.
My concern, based on personal observation and experience, is artificial food additives produced in China may or may not be produced according to specification. The FDA seems to have little interest in inspecting imported foods, instead it focuses on adding regulatory costs to American food processors and producers who are rapidly moving operations offshore.
I avoid artificial sweeteners and other chemical additives anyway, so the substitution of Chinese produced faux sugar for US artificial sugar, won’t be an issue for me.
Kinda wish we’d see a coffee price collapse
So there really is a such thing as deflation.
.25 should not matter. #OneAndDone
Sure is. It's what made the Great Depression --what made the deflation that made the depression is another long story. It also began the '09 crisis but that one was stopped after a quarter or two.
Reason deflation's bad is because when anyone runs a business or gets a job & buys a home he finds falling income crashing any chances of paying back the loans. Massive bankruptcies and bank failures. We used to have massive double digit deflation for a year or two followed by double digit inflation all the time --then with the '30's fiasco we finally quit the silly gold standard.
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