Sugar (SB)

The sweet staple feeding global energy and food needs. Sugar is both a food commodity and a biofuel feedstock.

2-Minute Beginner Summary

Sugar comes from sugarcane (tropics) and sugar beets (temperate). Brazil is the largest producer and decides how much cane goes to sugar vs ethanol based on prices. India is the second-largest producer with export restrictions. Sugar prices are volatile due to weather, government policies, and oil prices.

What Is Sugar?

Sugar (sucrose) is extracted from sugarcane or sugar beets. Raw sugar is traded on ICE; refined white sugar trades separately.

Why SB Matters

Sugar is in countless food products and is a major biofuel feedstock. Brazil diverts cane to ethanol when oil prices are high.

What Moves the Price?

Top 6 drivers affecting Sugar prices:

Brazilian Cane Allocation

Brazil chooses between sugar and ethanol. Oil prices and currency affect the decision.

Indian Policy

India can swing from importer to exporter. Government subsidies and export quotas matter.

Weather

Drought in Brazil, floods in India, frost in Europe all affect production.

Oil Prices

Higher oil prices make ethanol attractive, diverting cane from sugar.

Currency Movements

Brazilian real weakness makes Brazilian sugar cheaper globally.

Health Trends

Sugar consumption declining in developed markets due to health concerns.

Market Structure

Spot vs Futures

ICE trades raw sugar (No. 11 contract). White sugar trades on London ICE. Physical sugar trades at premiums.

Contango & Backwardation

Often in contango due to storage. Backwardation during supply tightness.

Key Exchanges: ICE Futures U.S. (Raw), ICE Futures Europe (White)

Contract Size: 112,000 pounds per contract

Seasonality

Multiple producing regions create complex patterns.

Peak Months: February, March, April

Low Months: August, September, October

Brazilian harvest (Apr-Nov) pressures prices. Northern hemisphere beet harvest (Oct-Dec) adds supply. Pre-harvest periods can rally.

Macro Sensitivity

Sugar is dollar-sensitive. It's also linked to oil prices through Brazilian ethanol economics.

USD Sensitivity: negative
Inflation Sensitivity: positive
Growth Sensitivity: neutral
Rates Sensitivity: neutral

Stock & ETF Exposure Map

Related Stocks

Related ETFs

Key Calendar & Reports

UNICA Bi-Weekly Report (Bi-weekly)

Source: UNICA. Brazilian cane crush and sugar/ethanol production

ISMA Monthly Report (Monthly)

Source: Indian Sugar Mills Association. Indian production and stocks

ISO Quarterly Report (Quarterly)

Source: International Sugar Organization. Global supply/demand balance

How to Trade Sugar

ETFs like SGG offer exposure. Sugar company stocks provide indirect access. ICE futures are the benchmark.

Frequently Asked Questions

Why does Brazil matter so much?

Brazil produces 20%+ of global sugar and can shift cane between sugar and ethanol, affecting global supply.

What is the sugar-ethanol mix?

Brazilian mills decide how much cane goes to sugar vs ethanol based on relative prices. A 50/50 mix is typical.

Why do oil prices affect sugar?

Higher oil makes Brazilian ethanol more profitable, diverting cane from sugar production.

What is the difference between raw and white sugar?

Raw sugar (No. 11) is unrefined. White sugar (No. 5) is refined and trades at a premium.

How do sugar taxes affect demand?

Sugar taxes in the UK, Mexico, and elsewhere reduce consumption of sugary drinks and processed foods.

Is sugar beet sugar different?

Chemically identical to cane sugar. Beets are grown in temperate climates (Europe, U.S.).

What is the world without India problem?

India's production volatility is so high that analysts often forecast the "world ex-India" balance separately.

How do subsidies affect sugar trade?

Many countries subsidize sugar production, distorting trade. India's export subsidies are controversial.

Glossary

Raw Sugar: Unrefined sugar (96° polarization), traded on ICE No. 11 contract.
White Sugar: Refined sugar (99.9°), traded on ICE London No. 5 contract.
Polarization: Measure of sugar purity. 96° is standard for raw sugar.
UNICA: Brazilian Sugarcane Industry Association - provides crush data.
Center-South: Brazil's main cane-growing region, producing 90% of the country's output.
Ethanol Mix: Percentage of Brazilian cane processed into ethanol vs sugar.
White Premium: Price difference between white and raw sugar, reflecting refining margin.
Tolling: Converting raw sugar to white on contract.
Hydrous Ethanol: Brazilian fuel ethanol used in flex-fuel vehicles.
Anhydrous Ethanol: Ethanol for blending with gasoline.