Venture: Sugar Rush
Issue 143;
I don’t know about you, but like most people, I am addicted to, or at the very least, fond of sugar, in its many different forms. Given how wonderful it is, it is surprising how little the price has done over the past 66 years. It has risen at less than half the inflation rate. Moreover, it trades below the prices seen in 1974, 1980, 2009 and 2022. Sugar is being given away.
Sugar vs US CPI since 1960
Sugar prices are finally rising again, and Europe is at the epicentre of the move. This summer’s droughts and heatwaves have led to supply estimate cuts for European sugar beet, from around 14.1m tonnes to 13.4m tonnes. This is far below the 2025/6 harvest of 16.6m tonnes. India also recently expanded its sugar import allowance, raising concerns about its own harvest prospects.
High inventories buffered price rises for a while, thanks to last year’s strong harvest. This had pushed sugar prices down, but growers responded to the surplus by reducing the land used to farm sugar. Given how the summer of 2026 turned out, that appears to have been a mistake. Now, with rising oil prices and El Niño building, the contributing factors are adding up.
This time, rather than the commodity, I have found a producer with high operational leverage.
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