Sugar is a common product that everyone has ingested at some point in their life. Like many other raw materials, you can also invest in sugar. There is more demand for sugar each year and that is why it might be interesting to invest in it, but what is it exactly?
The actual price of sugar is continously moving. This raw material, like platina, oil and wheat, is traded worldwide and therefore keeps moving.
What is sugar
Maybe you have heard the term sucrose before. This is the chemical name for sugar, but it means exactly the same. All naturally created plants produce sugar, like fruits, vegetables and even nuts. Through photosynthesis, green plants make sugar. Photosynthesis is a process that plants use to use the energy of the sun and turn it into food.
Of all plants, sugar can and sugar beets contain the largest amounts of sugar. And it’s the easiest and most efficient choice to use these plants to get sugar. The gained sugar is exactly the same as in fruits and vegetables and completely pure. It does not contain any conservatives or other additives.
Natural color of sugar
The color of sugar is mostly determined by the amount of molasses that remains on the crystals (or are added to them). This creates different tastes and even the moisture levels change.
But the natural color of sugar is white. When sugar is gained from the sugar plants, they will have a golden color at first. This is because there are other elements attached to the sugar crystals still. This golden sugar is then cleaned, which then shows the true color of sugar: White.
History of sugar
Sugar is world’s oldest documented goods, ever! It used to be so valuable, that there were actual sugar vaults.
It is very likely that the natives of New Guinea had enjoyed sugar back in 8.000 B.C., by chewing raw sugar cane. In the period of 8.000 B.C. to 600 A.D., the cultivation of sugar cane spread through traders across the sea through South-East Asia, China and India.
Worldwide, a lot of tonnes of sugar cane is produced and cultivated in over 100 countries. In comparison, sugar cane is produced 6 times more than sugar beets.
The largest producers of sugar cane are Brazil, India and China. Brazil is the largest producer and has about 4.5 million people working on it yearly. The sugar cane from Brazil is used in many applications. We can see it in biofuels (biodiesel), but also in creating alcohol. The biggest users of sugar, are usually also the countries where it gets produced.
Types of sugar
There are many different types of sugars. But all sugar is extracted from sugar beets or plants the same way. This is done by first extracting the juice. By using small adjustments in the process, different types of sugars are created. This variation can be seen in process of cleaning, crystallizing and drying of the sugars. Because of the different types of sugars, there are also different sizes of crystals, which offers different unique functionalities when used in foods and drinks.
You also hear a lot all the time about added sugars. But what are they really? Added sugars refers to a category that contains a diversity of sweeteners. These sugars are added during the processing of nutrients. They are derived from different types of sugar and are not raw sugar per definition.
Examples of added sugars are:
- Nectar from agave
- Brown rice syrup
- Coconut sugar
Lactose, or milk sugar, is a sugar that is present in the milk of all mammals. Cow milk contains about 4 to 5 percent lactose. Lactose is therefore also in most dairy products. Lactose also appears in certain tropical plants. It does not come from any other plant based products.
Dextrose, or glucose, is a naturally existing chemical compound with the formular C6H12O6. There are two enantiomeres of glucose: D-glucose and L-glucose. Only D-glucose can be foudn in nature and L-glucose is produced synthetically in relatively small quantities.
Maltose or malt sugar, is a reducing sugar that gives off two glucose molecules after hydrolysis. The taste of maltose is sweet. Maltose is a disacharide. The chemical name of maltose is α-D-glucopyranosyl–α-D-glucopyranose or 4-O-α-D-Glucopyranosyl-D-glucose.
What does sugar do to your body?
You will hear a lot that sugar is bad for your body. When we look at sugar scientifically, it is not true that sugar is bad for you necessarily. It is all about dosing and keeping control of the portions of sugar in your system. Let’s look at this more closesly:
Sugar is a carbohydrate
(Carbohydrates consist of macronutrients that contain starch, sugar and other sugars)
Carbohydrates are an important energy source for the human body. The essential role of carbohydrates – also sugar – is being an important fuel for the body.
Sugar is a product that has undergone many scientific studies. And the evidence that has been proven time and time again is that a healthy lifestyle based on moderation, diversity of food choices and physical activity give the best results of a healthy life. So sugar is not per definition bad for the body.
Growth in demand of sugar as a raw material
The predictions are that the demand for sugar will rise. The reason for this is that it looks like the Asian and other emerging economies start to gain wealth. Because of this wealth, the buying power increases in these countries. This will also increase the hunger for sweet (and often more expensive) food. This way the trade in sugar will get larger and the demand for sugar will rise.
Value of sugar
Sugar is a carbohydrate that has been used for thousands of years. We see it in numerous applications in food. We use sugar to give taste to food, to keep moisture in baked goods and to preserve food. But sugar can also be used to create ehtanol for fuel.
Because of the many different applications of sugar, this raw materials is a big one on the worldwide market. Without sugars we cannot live.
What determines the value of sugar
Sugar is a raw material that is traded worldwide. The price of sugar fluctuates with these trades. There are a couple of pointers that can make the price of sugar go up or down:
- Value of the Brazilian currency
- Worldwide delivery
- Worldwide demand
- Ethanol demand
- American dollar
- Health issues
The value of the brazilian currency
Brazil is the biggest exporter of sugar and they have the biggest influence on the price of sugar. As soon as there are swings in the brazilian currency, you will see it in the global sugar market.
The global delivery of sugar is a key factor of the value of sugar as a raw material. It takes about 12 to 18 months before a planted sugar cane can be harvested. In this cycle, the farmer has to have prepared, sown, irrigated and harvested the soil.
An important correlation between the wealth and the sugar consumption exists. Sugar is mainly seen as a luxury, which shows in the more rich economies consuming more sugar than the poorer ones.
The fastest growing sugar consumers are currently Asia and South America, because they have increasing wealth. This is positive for the value of sugar. While a crisis in these emergin markets can have it crash just as fast.
Because sugar is a natural product, the production is very dependent on the weather. A successful production of sugars demands a freeze free season with enough rain. Bad weather conditions, in for example Brazil, can have a damaging effect on the supply of sugar.
Demand for ethanol
To create ethanol, sugar is crushed and used as an ingredient for this biofuel. Because ethanol is a competitor of petrol, we see the oil prices respond to it. A dip in the oil price can surpress the demand for ethanol (and therefore sugar), while a high oil price and have the demand for sugar rise.
The American dollar
Like other raw materials, like copper, soy beans and corn, sugar prices are expressed in American dollars. A strong american dollar surpresses the sugar price, but the opposite is true as well. If the american dollar is weak, this increases the price for sugar.
Sugar is connected to diabetes, obesitas, heart conditions and dental problems. Because governments are being looked at when there are issues with these conditions, this can lead to taxes and limitations on products with a lot of sugar. This can impact the sugar price.