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Sugar (sucrose) is mainly gained from sugar beets and sugar canes. There is no difference between sugar from beets and canes, chemically and physically.  The white sugar acquainted to us consists of four different kinds of sugar: glucose, dextrose, fructose (fruit sugar), and lactose (milk sugar). All kinds of sugar belong to the group of carbohydrates. Sugar is contained in many plants. However, in highest concentration it is contained in the sugar beet (8-22%) and in the sugar cane (7-18%).

Sugar cane originated some 2,500 years ago on the Indian sub-continent, and for centuries has been a highly valued and widely traded commodity. Because of its primary use in foods prepared in many cultures, its trade value was based upon its universal use, not only as a flavor enhancer but also as a food preservative. Sugar’s market significance was further increased because of its fermenting properties and its byproducts (e.g., molasses), which had equal or greater economic value than the granular sugar and less perishability when shipped long distances.

Sugar canes are cultivated in tropical and sub-tropical regions, because there are periods with lot of rainfall and periods of great heat and drought. The sugar beets on the other hand are usually cultivated in moderate climate zones, because all year rainfall at moderate temperatures provide perfect conditions. While sugar canes are cultivated and harvested all year, the sugar beets are sowed in spring and harvested in fall.  70% of the sugar produced in over 100 countries comes from sugar canes, whereby this share is still increasing. Reason for this is that sugar from canes is less price-sensitive because the plant is not dependent on seasonal cycles. Sugar beets come especially from the EU and Russia. The sugar beet is a comparatively young crop and is processed to sugar since just about 200 years.

From Brazil – the most important producers and exporters for sugar – come about 16% of the global sugar production, followed by India (14%), China (6%) and the U.S.A. (5%). The most important producing countries in Europe are France, Germany and Poland. Sugar cane is the most important energy plant in Brazil. The globally biggest producer manufactures the half of its sugar harvest to fuel for cars. Over 60% of the global production of ethanol is based on sugar.

As the sugar market grew more global in nature during the twentieth century, it became more vulnerable to supply and demand shifts in various parts of the world. Before the development of the sugar beet industry, the semi-tropical location of the original sugar cane source meant that supply routes were long, tenuous, and easily disrupted. The closing of the European markets for sugar during World War I represented such a supply disruption.

Today, sugar remains a vital commodity in the world marketplace and has expanded its presence in a broad range of economic areas from foods to fuels. Sugar prices trade up and down, due to a variety of factors, including extreme weather, disease, insects, trade agreements, refinery activity, and government price support programs. Sugar futures and options represent essential hedging tools for producers, exporters, candy manufacturers, trade houses, bakers, refiners and dealers.

Sugar is traded on several stock exchange markets and in different classifications. The most important contract is the sugar No. 11 contract traded at the New York Board of Trade (NYBOT), which refers only at sugar cane. The future is traded in U.S. Cent per American pound (lb.) and comprises 112,000 lbs. That matches about 50 metric tons (t) (1 lb = 0,453592 kg).

Sugar No. 14 – equally traded at the New York Board of Trade (NYBOT), refers to sugar produced in the U.S.A.

The white sugar No. 5 – traded at the London International Financial Futures Exchange (LIFFE) – includes the European beet sugar. The quotation takes place in U.S. Dollars per metric ton (t), whereby a contract comprises 50 t.

Most important stock exchange centers: NYBOT and LIFFE

Contract-cycles: January, March, May, July and October

Contract-cycles: March, May, August, October and December

Contract-size: NYBOT: 112,000 lbs., LIFFE: 50 t


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