Food Outlook November 2008 - Sugar
Improved supply and demand balance prospects may provide some support to prices

International sugar prices 6 followed a steady upward trend between May 2008 and August 2008, mostly in anticipation of a significant shortfall in the major producing countries of India and Brazil. But, since September, prices have been falling, as indications now suggest relatively better harvests in those countries than previously expected. The International Sugar Agreement (ISA) daily price for raw sugar, which reached US 12.07 cents per pound in May, increased to US 14.23 cents per pound in July and to US 14.61 cents per pound in August, before declining to US 13.53 cents per pound in September. For the first 9 months (January-September) of 2008, prices averaged US 13.09 cents per pound 7 , some 31 percent higher than the corresponding period in 2007. In 2008/09, sugar production is forecast to be lower than consumption for the first time since 2004/05, contributing to a reduction in stocks, which accumulated to record levels over the past two seasons. As a result, international sugar prices could start recovering later in the season.

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The impact of European Union sugar policy reform on developing and least developed countires (from the Commodity Market Review)
Radical changes in the Common Market Organization for sugar have recently been agreed by the EU agricultural ministers. These will interact with preferential trade initiatives and with the need to comply with the outcome of the trade dispute on export subsidies. Apart from EU sugar producers, the reform will affect developing countries and least developed countries that depend on the preferential treatment they enjoy for sugar exports to the EU. This paper focuses on the impact of the EU sugar policy reform and the Everything But Arms initiative on the African, Caribbean and Pacific countries, the least developed countries and the European Union. We develop an empirical model structure comprising a partial equilibrium model for the sugar market and a gravity model to replicate least developed countries’ bilateral trade with Europe. Domestic support and other policy instruments are included in the partial equilibrium model, whilst gravity is used to model the abolition of import tariffs for sugar originating in least developed countries subject to trade costs. Results suggest that sugar production in the European Union will contract, leading to a significant decrease in unsubsidised exports. African, Caribbean and Pacific countries will experience significant reduction in their export revenue, whilst the initial impact on least developed countries may be limited, but increasing in the medium run. [ more... ]

Fao Trade Policy Technical Notes - No. 6. Sugar: the impact of reforms to sugar sector policies - a guide to contemporary analyses
This technical note is intended as a guide to assist in the interpretation of a range of existing analytical studies of the impact of current sugar sector policies on world market conditions and on developing country producers, and of the insights that these studies can provide (and those that they cannot) in determining the potential impacts of future reform initiatives. This is especially important in the case of the sugar sector, since recent announcements of major reforms are yet to be fully incorporated into contemporary analytical studies. [ more... ]

The Brazilian ethanol programme: impacts on world ethanol and sugar markets, by Tatsuji Koizumi. FAO Commodity and Trade Policy Research Working Paper No. 1.
The sugar market in Brazil has a strong relationship with the ethanol market. The Brazilian government has now abolished all the sugar market intervention measures except for the control on the ethanol-gasoline blend ratio. [ more... ]