The risk of a global sugar shortage is intensifying: prices have risen by more than 25 percent
El Niño is considered one of the natural phenomena with the strongest impact on the sugar market.
The risk of a global sugar shortage is increasing. This is caused by increased rainfall in some regions of the Southern Hemisphere, while drought is observed north of the equator.
Weather conditions are significantly affecting the world's major sugar producers — Brazil, India, and Thailand. According to analysts, El Nino is considered one of the natural phenomena with the strongest impact on the sugar market.
In Brazil, excessive rainfall is slowing down the harvesting and processing of sugarcane. In India, the weak arrival of monsoon rains is negatively affecting yields. Thailand's sugar-growing regions have been damaged by drought.
In Europe, El Nino has intensified heatwaves, affecting the sugar beet harvest. In France, Europe's largest producer, sugar production volume may fall to its lowest level since 1980.
As a result, sugar prices are rising on the world market. This year, its price has increased by 18 percent. Analysts forecast that the price of white sugar may rise by around another 20 percent over the next 12 months.
El Nino is also affecting other agricultural products. In particular, rice cultivation in Southeast Asia and cocoa cultivation in West Africa are at risk due to drought. Coffee and palm oil production may also suffer from weather conditions.
At the same time, El Nino's peak activity level is expected to be observed at the end of this year.
