We provide a five-year forecast for the world sugar market every few months. In our last one, we made three key predictions:
1. Brazil’s Dominance of the Sugar Market Should Continue
We think Brazil’s mills will plant and crush more cane if high raw sugar prices persist.
The sugar market could therefore be faced with increased concentration of supply. More sugar will be available for export in the Americas (and perhaps India), with poorer availability coming from other less competitive regions.
2. Cane and Beet Farmers Should Continue to Receive Ample Support
The COVID pandemic has also increased governments’ focus on ensuring food security. As a result, we think India will continue to subsidise sugar exports for at least another
season. We also think Thailand will continue to top up cane payments to farmers if required, and we suspect the USA retain its sugar program in its current form.
3. Sugar Consumption Will Rebound Post-COVID, but Conversations Around its Health Risks Are Becoming More Commonplace
2020 was a unique year, with COVID lockdowns causing a drop in out-of-home sugar consumption. We don’t think this will be repeated in the future. Supply chains are more
resilient, and the out-of-home sector is attempting to become COVID-proof. We think sugar consumption will grow again in 2021.
We do think COVID will increase the debate about sugar and health. In the short term, governments are doing what they can to ensure their populations don’t go hungry and aren’t taxed excessively. But this won’t last for ever.
This is a virus which targets those who are already vulnerable: the elderly and those with underlying health conditions. Metabolic syndrome (obesity, diabetes, hypertension, etc) is one such condition, which means the war on excessive sugar consumption may intensify in the coming years. Sugar taxes will increase in scale and scope. Regulation of sugar content in foods will become more severe.
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