05 Sep Sugar Market Update

The U.S. sugar market is in a unique state right now that I have not seen in my 11 years working in the industry. It appears the demand for non-GMO ingredients has created two very distinct subsets to the domestic refined sugar market. Cane sugar has felt an outsized increase in demand from the non-GMO movement because of its position as the only non-GMO option for mainstream sweeteners, while sugar beets being predominately GMO have caused some users to seek an alternate source. Corn Sweeteners are not an option as they too are GMO.

This has lead us to our current situation with cane sugar more expensive than it was a year ago and beet sugar less expensive than it was a year ago. Additionally, refined beet sugar is selling on a spot basis at a lower level than the nearby #16 raw cane sugar market, a spread that is typically 6-10 cents.

There is little that the USDA can do to alleviate the supply situation for the cane sugar market. If they open up the market for more raw sugar imports, the price of cane sugar would come down and further depress the beet sugar market. That market is already dangerously close to forfeiture levels and that is what the USDA is most eager to avoid. Due to this, I do not see much change for the foreseeable future.