Sugar lows

OECD Observer

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World sugar prices are likely to remain low over the next few years due to increased exports from low-cost producers and continuing high support and protection in many OECD countries, the latest issue of the OECD Agricultural Outlook found.

Brazil, the leading low-cost producer, has a competitive sugar industry that matches the total tonnage currently traded on world markets. Developing countries hold the key to consumption growth, and the potential in the longer term to eat into the large stocks of sugar on the world market and improve the balance between supply and demand. The Agricultural Outlook cites China as a country with apparent scope to boost consumption and imports as incomes rise, but notes that other factors, such as official import policies and the availability of artificial sweeteners, must also be taken into account.

The latest Agricultural Outlook sees raw sugar prices improving slightly to US$191.8 per tonne in 2004/2005, up from US$172.0 in 2003/2004, but then falling in subsequent years to reach US$165.3 per tonne in 2008/2009. World stocks will see little change, at 68.3 million tonnes in raw sugar equivalent in 2008/2009 compared with 67.5 million in 2003/2004.

World production of agricultural products in general is forecast to grow over the period to 2008, boosted by a revival of the world economy from 2004 onwards, with an increase in consumption of coarse grains and oilseeds and a shift away from wheat- and rice-based staple foods towards more processed food and higher protein products such as meats.

©OECD Observer No 238, July 2003

Economic data


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