had doubled in price. It has given back 10% so far in September.
This
appears to be a supply and demand issue. Global production is down due
to weather, while demand is increasing. This chart tells that story.
Like
with most things, it is never just visible conditions that influence
prices. There is always a side story. For example on August 13th the WSJ
revealed a letter from some of the big sugar players. No doubt but that
this had something to do with the late August spike in the price. From
the article:
"Some
of America's biggest food companies say the U.S. could "virtually run
out of sugar" if the Obama administration doesn't ease import
restrictions amid soaring prices for the key commodity. In
a letter to Agriculture Secretary Thomas Vilsack, the big brands --
including Kraft, General Mills, Hershey. and Mars -- bluntly raised the
prospect of a severe shortage of sugar used in chocolate bars,
breakfast cereal, cookies, chewing gum and thousands of other products."
This
kind of talk from credible players encourages hot money. But when it
started to rain in India at the beginning of the month the sugar market
was overbought and ripe for a correction. One can only hope that the
folks at KFT, GIS and HSY were able to buy low and sell high. They
certainly were in the catbird's seat on this one.
There is a wild
card in the sugar story. It is called STEVIA. My nose tells me that
there is money to be made with this. I haven’t figured out how.
This
is an old and interesting story. In the late 70’s none other than
Donald “Rummy” Rumsfeld was the CEO of G. D. Searle. Shortly after the
inauguration of Ronald Reagan the new FDA head approved Aspartame.This
decision made NutraSweet. It made G.D.Searle. It gets better.
Stevia
is a plant that is also a sugar source. It has been used in Japan for
the past fifty years. Of interest is that while the US FDA was banning
stevia and approving Aspartame the Japanese were taking precisely
the opposite path.
The FDA banned stevia in 1991. One year after
Bush I got into office. That decision was controversial. The argument
was put forth that the designation violated the FDA's own guidelines
under which natural substances used prior to 1958, with no reported
adverse effects, should be generally regarded as safe as long as the
substance was being used in the same way and format as prior to 1958.
The FDA has allowed stevia as a dietary supplement but not as an
additive. One would think that it was either safe or not safe. Either
way the domestic sugar industry got a free lift. +2 for G.D. Searle/
their new owner, Monsanto.
The interesting part about this was
that the FDA determination was generated in response to an anonymous
letter. There have been several FOI suits. We still don’t know who
wrote that letter. Any guesses? It gets better.
In December of 2008, in the last months of the Bush II administration what does the FDA do? It reverses the 91 ruling and allows stevia to become a food additive. Is this a big deal? You bettcha it is. Look who is playing in this ballpark now:
-In
2007, Coke announced plans to obtain approval for rebiana for use as a
food additive within the United States by 2009, as well as plans to
market rebiana-sweetened products in 12 countries that allow stevia's
use as a food additive.
-In
May 2008, Coke and Cargill announced the availability of Truvia, a
consumer brand stevia sweetener containing erythritol and Rebiana,
which the FDA permitted as a food additive in December 2008.
-Coca-Cola announced intentions to release stevia-sweetened beverages in late December 2008.
-Pepsi
and Pure Circle announced PureVia, their brand of stevia-based
sweetener, but withheld release of beverages sweetened with reb-A until
receipt of FDA confirmation. Since the FDA permitted Truvia and
PureVia, both Coca Cola and PepsiCo have announced products that will
contain their new sweetener.
So the fat cats are in this
in a very big way. If Pepsi, Coke and Cargill are making investments it
is a pretty sure bet that stevia is coming to America.
The
stevia story is not likely to influence the price of London White Sugar
any time soon. But the sugar story is a window into how things get done in
this country. That widow is smudged with dirt.
Over the years
there has been many questions raised regarding the safety of Aspartame.
I am not smart enough to understand the facts on that. Monsanto bought
Searle and later sold Aspartame. This is what Monsanto has to say about
it today. Not exactly a "ringing product endorsement".
Stevia has been sold in the supplement departments in health food stores for 15 years. It just wasn't "approved" as a sweetener so it was sold in bulk leaves and drops or powder for those that wanted to use it as a sweetener. The Rummy story is well known by those who disliked aspartame. I read the whole thing in the late 90's.
The main thing about stevia is it can't be patented, like aspartame was and Splenda still is. It is easy to grow, every supplement company out there carries it in one form or another, and if the big beverage companies start to use it, they are just lowering their costs. The fact that they started sweetening with Splenda vs aspartame in the last few years was due in part to the backlash against aspartame and a small loud group of nobodies claiming it was in part responsible for the rise of ADD. There was also consumer demand for an alternative to aspartame and Splenda fit the bill. However, Splenda is spendy so stevia makes a lot of sense.
Any thoughts on GLG Life Tech Corp (TSX: GLG), a producer of Stevia.
Check out GLG Life Tech Corp (TSX: GLG), a producer of high quality stevia.
I just started using it. It's got a little aftertaste. Make sure to get it from Paraguay.
I'd prefer sugar over anything else quite frankly.
Or Honey.
Drink Coke from Mexico. Real cane sugar and no artificial sweeteners.
I don't know about the US sugar markets (as it is somewhat insulated from the world markets) but sitting in India I know that this price rise is based on some fundamentals. India has a severe shortage of sugar this year and is importing raw sugar heavily to meet the demand. The reasons for the rise are manifold:
1. Nature of the sugar cycle in India - Whenever India turns into a net importer from a net exporter, prices go up. We are in that part of the cycle after seeing deep lows for the last 2 years.
2. Crop Diversion - Indian farmers have migrated to other lucrative crops like paddy, turmeric and banana.The Govt of India meddles heavily into sugar prices and worsened the situation by keeping cane prices low for the last few years. Still, these crops fetch much better returns than sugarcane, so there still some time for the prices to catch up
3. Drought in India - This has hit the sugarcane crop hard, compounding an already bad situation
4. El Nino effects - Has caused extra rainfall in Brazil(largest producer of sugar)and irregular rain in Australia(another big exporter)
Of course, many people know this and as is the custom in our markets,hot money has moved in a big way. It got slightly ahead of itself, and the correction and consolidation was to be expected. The peak festival season is about to start in India. Just wait till end Oct-Nov to see the real action unfold. Check the prices in 1974 and do some conservative inflation-adjusted comparisons and you'll find that we can still go much higher.
-Venkatesh
some ancient readings on this wonder additive suggesting a mutagenic aspect
Metabolically activated steviol, the aglycone of stevioside,
is mutagenic
http://www.pnas.org/content/82/8/2478.full.pdf
Bureaucracies like the FDA are put into place and bolstered and protected by leftist support. Don't try to pin this on republicans.
Right now natural thyroid is being attacked by the FDA. Is that the republican's fault, too?
Government, in all its incompetent and idiotic forms, should get out of every single area of the market place and let the chips fall.
Just look at what a laughing stock the American public education system is....run by government bureaucrats, and so horrible that people even resort to educating their kids at home.
Thanks Bruce, another very worthwhile read.
Aspartame is a poison, and was recognized as such by the FDA many years before it was approved by "Rummy." Check out the doc "Sweet Misery;" which tells the whole sordid tale.
All corn syrup is now a genetic variant of natural sugars; and will shoot your blood sugar way up, far faster than cane sugar.
Go with "real" cane sugar, stevia or xylitol.
Corn syrup is the fastest way to give people diabetes known to man.
"All corn syrup is now a genetic variant of natural sugars"
Um, I think you mean molecular variant (maybe?). A natural sugar does not have a gene.
I wonder if pension funds are investing in "soft commodity" indexes and the flows are driving the price of sugar and other soft commodities up. They invested billions into the Goldman Sachs Commodity Index which is 75% oil futures, driving the price of gas up.
As for aspartame and artificial sweeteners, they are sweet poison. Along with corn syrup, diet soda pop has contributed to an epidemic of obesity. Moreover, I defy you to find sugar free gum with no manitol, sorbitol, and other crap. I stopped drinking sugar free soda after I was diagnosed with Multiple Sclerosis 12 years ago and I recently stopped chewing sugar free gum because it gave me digestive problems and headaches. Instead, I buy alcohol-free Crest mouthwash and rinse after lunch or stick to breath mints with no artificial sweeteners.
The only people more shady than the banksters on Wall Street are the unethical crooks in the giant agribusiness industry.
Well.....now who are we supposed to believe?
"http://www.cspinet.org/new/200808281.html"
WASHINGTON—Coca-Cola and Pepsi are planning to introduce new drinks made with rebiana, an extract of stevia leaves that is 200 times sweeter than sugar. But according to a new 26-page report by toxicologists at the University of California, Los Angeles, several, though not all, laboratory tests show that the sweetener causes mutations and DNA damage, which raises the prospect that it causes cancer. In a letter to the Food and Drug Administration, the Center for Science in the Public Interest says the agency should require additional tests, including a key animal study, before accepting rebiana as Generally Regarded as Safe, or GRAS.
"Rebiana" is NOT stevia! Isolates are never the same as the whole.
+1000. That is not stevia
Aspartame is a poison, and carcinogen. Researchers in Italy have proved it.
The Prop 65 committee are considering banning it in CA
Ya'll might want to look at IPSU - Imperial Sugar. goto www.pleaseactaccordingly.com for some great info on IPSU and the sugar market.
Great story...I posted two weeks ago about the speculation on sugar. I attended the Sugar Baron's Ball last year in CDC and heard whispers about Sugar going to the moon...
MinnNice: Sugar is a global commodity. The increased demand is probably not a result of increased consumption in the developed world. This is China and other countries increasing their demand as their economies grow. They want the stuff that we have had for years. Soda is monster business in Asia. More Mt. Dew is sold in Asia than the US.
In this global recession there will be shortages of many things. Sugar,copper,rice,oil come to mind.
Excellent work Bruce. I always like your articles.
I have to think high fructose corn syrup is a big player in this drama as well.
I'm no expert on the finer points of sweetener history, but I have to think high fructose corn syrup is a player somewhere in the drama you outline.
I found that aspartame gave me a headache, as well -- but I switched out of sodas and into tea....with about 2 t of turbinado in a three cup pot.
If you're looking to see how government corrupts everything it touches, look no further than the whole sugar/corn syrup/artificial sweetener tale of the last few decades.
I drink massive upon massive amounts of diet mountain dew, diet pepsi, etc (1/2 gallon or more a day.) I have been doing it for years and I have sired two perfectly healthy children and I myself have a steady resting heart rate of 46 beats/min. If aspartame is bad for you, it hasn't yet shown it's effects on me, and I would be a prime candidate for it, because I consume a LOT of it. It may have some detrimental effects, or perhaps moreso if people are allergic to it or whatever, but I'm good, so it's not certain doom or anything. I realize that an anecdote is not scientific, and hell, it's starting to sound like global warming where I say 'damn it's cold over here, what about all that global warming?' I'm only pointing out my personal experience.
While I'm sure that government action on the say-so of lobbyists has had dramatic effects on who benefits from the marketing and sale of sugar vs aspartame etc, but that doesn't mean the FDA approving it under such pressure makes it poisonous. It's just implies they didn't really necessarily do their due diligence. Baby, bathwater and all that.
My uncle smoked like crazy and lived to 92. Does this example means smoking is good for you? Just asking
Hmmm, You and your spawn are healthy? So you think. Enjoy those cumulative affects. You're better off with the HFCS than a substance which breaks down into formaldehyde.
"If man made it, don't eat it" - Jack Lalanne
This is not THE source, but it links to many. The formaldehyde thing is a myth.
http://www.snopes.com/medical/toxins/aspartame.asp
People, please don't drink soda, and if you HAVE to, pick up Jones soda or something.
And on a related note, boycott Coca Cola.
http://en.wikipedia.org/wiki/Criticism_of_Coca-Cola
http://news.bbc.co.uk/2/hi/south_asia/4776623.stm
http://www.hindu.com/2005/08/31/stories/2005083112811000.htm
Other stories displaying the utter lack of humanity of this corporation can be easily found with an internet search. Of ourse there are plentyof other corporations that deserve boycotts, but this one stands out as such a boycott will not only hurt an evil corporation but also help you with your health.
Aspartame always gave me brutal headaches, and when I looked for info on the web about it (this was more than a decade ago) I found BBS messages aplenty about various health effects from moderate consumption. Mostly headaches and arthritis, but some carcinogen talk. That was enough to say goodbye to it; and it was what prompted me to start reading the label on anything I bought to eat or drink.
I would be very curious to see whatever happened with it over the years; this article is intriguing.
Good story. Thank you.
Bruce... Why do you think sugar demand is up in this Great Recession?
Imho I don't think it would be a bad thing if sugar skyrocketed... and therefore the prices the food manufacturers charge to make their processed junk would also go up... and the health of our country would improve... sugar used to be a scarcity when America was settled by the Europeans so we know we can live without it.
Lastly, I am not sure if Stevia will be all it is cracked up to be... doesn't tickle my taste buds... but who knows... I don't like Aspartame either and they sell enough soft-drinks with Aspartame in it... I am a water girl myself.
Not much of that processed crap is made using sugar any more. It's aspartame, sucralose, or high fructose corn-syrup. I think demand may be up as people learn how dangerous the above alternatives are and I think supply has a much bigger part. Everywhere I've traveled, sugar farmers were quitting because the price has been crap for 30+ years.
be careful. high fructose corn syrup is the target of hippy anti-establishment conspiracy natural food only advocates, but chemically it is glucose and fructose. two 100% natural sugars. The only unnatural thing about it is the ratio of one to the other. don't be fooled by all the hipster crap. While sodium saccharide was shown to be poisonous and carcinogenic in doses higher than most persons intake of water to bodyweight ration in labratory mice, it is only one or two studies. This is not aspartame, but the research is often confused with it, because it's another sweetener that comes in a packet at your table in the restaurant. Seriously. it's one thing to be suspicious and question everything, but it's quite another to assume that something is cancerous.
By the way, another thing people always think is part of this is that warning on the back of diet soft drinks that says something about Phenylalanine. This has nothing to do with it, and that warning is for people with a particular allergy. It doesn't, as a lot of people like to bandie about, mean that aspartame causes damage.
I wouldn't be so quick to dismiss the claims against HFCS. I originally felt the way you did and decided to do some research into it.
Just looking at how it is produced raises a red flag. They heat the stuff to a crazy temperature to make it. The major risk, and this is mostly postulation at this point, is that it could create a free radical when metabolized by the body. Free radicals are usually not a big issue, as the body has ways to combat it (such as anti-oxidants). However, when you look at how much of one's sugar intake can be HFCS, it could be possible you overload your body's ability to control the free radicals.
All artificial sugars have been generally regarded as safe, until they weren't. Except Splenda. Anyone who thinks its safe to consume a sugar with a bunch of chlorine attached to it deserves the consequences.
I'm not on the anti-HFCS bandwagon. However, I do think it should be used in moderation and prefer products that have sugar over HFCS to balance out my intake, since I am such a sugar junkie.
doesn't table salt have a 'bunch of chlorine' attached to it? I'm not chemistry genius, but toothpaste also contains something with a bunch of fluorine attached to it.. I know that anything in other than moderation can probably be construed negatively, but I wouldn't go there based solely on the fact that some compound joins an element which is corrosive in it's elemental form. It's no longer in it's elemental form, so it's properties differ.
Chloride (Cl-) and Flouride (F-) are ions (or anions to be more specific). They are not very reactive in this state. They are "salts".
Organic halides are when Cl or F (or Br or I) is bonded to carbon in an organic molecule. Splenda has 3 Cl substituted for three hydroxyl (OH) groups in sucrose. Organic halides are typically much, much more reactive to other organic molecules (such as DNA, proteins, etc.) than anions and they can form free radicals. Many herbicides and pesitcides are organic halides (think DDT). Note that I am not making any claims on the safety of Splenda.
Sorry for the nerd-mode but there is a big difference between what is essentially a salt vs. an organic halide.
Thank you for taking care of that one for me. Obviously, we have Cl- in our bodies and couldn't live without it. However, as the person above pointed out, its when the Chlorine is forced onto the sugar and becomes part of an organic molecule that it has the potential for damage to the cells.
Not sure the chlorine has anything to do with the danger. It's the proportion of fructose which is grossly out of scale with any natural level of fructose you might consume from eating fruit. In high levels it turns out fructose is a particularly dangerous sugar with negative impact on the circulatory system in particular: extremely high fructose levels are associated with increased risk of heart disease, increased clotting, etc.
In addition until quite recently mercury reagents were used in the production of high-fructose corn syrup and detectable levels of mercury contamination were still present in some products purchased as recently as 2008.
Mercury reagents. Ok, finally someone has brought up a reasonable reason to worry about it. The concerns with fructose proper being a problem would be of course mirrored in all of the things that contain fructose proper, like fruits too. Which would imply that "you can die of heart disease from eating too many peaches." That may be true too, I just never heard that. Thanks for giving me something to think about! (I tried finding info on the 'web' about it, and I kept getting the wiki entry, which mentions 'controversy' but nothing of the scientific reasoning behind it, or some other propaganda junk from the hippy lobby. Your information is neither, and is actually helpful.)
I was originally going to say legislation, and it appears that a large part of the run up is short supply and increasing demand. Most of this sounds to be weather related, but there's also a trade restriction piece on the US side that's probably keeping prices high(er). From what I've read, the Sweeteners Lobby is pitching a fit to increase import quotas.
Not to let my adhd-addled mind wander any further, but I'd be curious if there's a sugar-play going on, kind of like tobacco, now that this bill is gaining momentum. Base a sin tax as a % of sales on items containing sugar, then restrict imports and cause a general price inflation. Everyone runs for the exit, save for the commodities rat fucks and HAL9k's.
Aspartame is a killer. Stevia is a great natural product made from leaves and is actually sweeter than sugar so you can use less.
One of the reasons demand for sugar increased is that corn syrup got some bad press and companies rushed to reformulate out of corn syrup and back to good old fashioned sugar.
Isn't there research that Stevia reduces guys' sperm count?
Soy, for sure. I am an avid label reader and avoid things like hydrogenated oil and artificial flavors. I use raw honey and also stevia for beverage sweeteners. Glad to report no harmful side effects.
But you have a vested interest here Kool-Aid man - you pitch chemicals and sweeteners to poor inner city kids, just like Sunny Delight!
Love the contains 10% real juice type labels.
LOL! Nice one. Those damn weeds
thanks...