Author Description

World sugar prices are forecast to remain above current support levels through 2021. Understanding the dynamics that affect the world price of sugar is imperative for U.S. sugar policy. There are three basic determinants of medium- to long-term world raw sugar pricing. The first is the long-term equilibrium relationship between world raw sugar prices and costs of producing sugar in Brazil, the world's largest sugar producer and exporter. An important effect on costs operates through the Brazilian currency exchange rate with the U.S. dollar. The second is the effect of medium-term world sugar supply-demand imbalances on pricing. Relative stockholding has an important effect on the sensitivity of the world sugar prices to changes in overall world sugar availability. The third is a risk-related component: how current prices are affected by errors in forecasting supply and demand balances of previous years due to unanticipated events. Tables and figures. This is a print on demand report.