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This article is about Sugar Prices in general. For the specific futures contract, see Sugar No. 11 Futures.
Around 160M metric tons of sugar are produced every year, with the largest producers in Brazil, India and the European Union The primary driver of sugar prices is government regulation. Many governments heavily subsidize their sugar manufacturers, to "dump" cheaply-priced sugar in the market, while the United States government has tried to elevate prices within its borders by imposing import restrictions. Since sugar is a good source for ethanol production, oil prices and the demand for ethanol are also impact the international price of sugar; for example, in the first half of 2008, sugar prices increased by more than 20% in response to rising gasoline prices.
Most commercial sugar is produced from two main sources: sugarcane and sugar beets with sugarcane accounting for about 75% of global production and sugar beets supplying nearly all of the remaining production. Other minor commercial sources include the date palm, sorghum and the sugar maple. 
Currently, 69% of the world's sugar is consumed in its country of origin, while the rest is traded on international markets. 
Brazil is the world's largest sugar producer, followed by India (which is the world's largest consumer), the EU and China. In the 2007/08 season, Brazil produced 31.3 million tons, India produced 28.8 million tons, the EU produced 17.57 million tons and China produced 14.6 million tons of sugar. 
The 2009/10 season has been particularly troubled by abnormal weather patterns. Brazil has seen much higher levels of rainfall than average, while India suffered its driest June in 83 years. 
In the U.S., sugar beets are grown year-round and account for 60% of total sugar production, while sugar canes are grown perennially and account for 40% of US total production. Both production processes yield the same sugar product. Sugar production in the United States generates $10B in economic activity annually, and the sugar/corn sweetener industries generate $21.1B in economic activity.
Sugar is used in food products to sweeten and add texture and color. On average, each American consumes 45 pounds of sugar, 45 pounds of high fructose corn syrup (HFCS) and 2 pounds of honey/syrup yearly. In total, Americans consume more than 10 million tons of sugar every year. Sugar end products are raw cane sugar, wholesale and retail refined sugar, cereal, candy, baed goods, and ethanol.
From 1994 to 2004, sugar prices dropped significantly as a result of increasing supply. While supply depleted from 2004 to 2006, it has resurged since then, which is reflected in the general drop in prices. Within the past year, however, concerns regarding high fuel prices (see below) have pushed prices higher.
The US is the second largest net sugar importer. Other key players in the world sugar market are the European Union (EU), Brazil and India. The EU, like the US, has implemented policies that artificially inflate sugar prices. Brazil, on the other hand, heavily subsidizes its sugar farmers to support its sugar-ethanol program.
Between January 2009 and August 2009, the price of sugar nearly doubled due to poor harvests in India and Brazil. Indian yields were threatened as key sugar growing regions were threatened by dry spells, causing India to become a net sugar importer for the second time in history. Combined with the inability of Brazilian sugar mills to secure financing to expand operations, a particularly wet season in Brazil slowed harvests and reduced outputs. USDA officials have stated that production of sugar beet and cane in the US will negate the drop in foreign supply; however, food manufacturers remain fearful that sugar will remain at elevated levels.
'Bold text'Bold text'===Sugar Imports/Exports in North America, South America, and Asia=== The following table is compiled from the USDA's twice-annual world sugar market summary. South America produces more because Brazil prduces the most sug
|Region||Year||Total Production||Total Imports||Total Exports||Total Use|
Many of these companies buy sugar through long-term (5-6 years) hedging contracts that dampen the effect of price hikes, and sometimes pass on price increases to consumers. In addition to harming bottom-line earnings, rising sugar prices have empirically caused lowered employment in US food businesses, the relocation of such businesses to Canada and Mexico, and growing imports of sugar-based food products.
Around the world, sugar is one of the most heavily-subsidized commodities. 80% of foreign sugar market prices are subsidized by their respective governments to match the price of sugar in the United States, a value that is lower than production costs for sugar in those countries. This practice, called dumping, enables foreign manufacturers to eliminate sugar surpluses and gain market share. In response to price dumping, Congress has enacted legislation (the Farm Bill in 2002) that imposes foreign import restrictions on sugar. Such legislation helps US sugar farmers compete with foreign producers, but hurts the consumer and US food companies since they have kept domestic sugar prices more than twice as high as world prices. Therefore, the various political influences on the federal government, such as lobbying by sugar farmers, are a key determinant of sugar prices in the United States.
More than 50% of world ethanol production stems from sugar. Producing ethanol from sugar is more efficient than producing ethanol from corn (the ratio of required input energy is one to two). Brazil is the leader in this production process, using 60% of its sugar canes for ethanol. On the other hand, less than 3% of the ethanol produced in the United States comes from sugar. Commercialization of the sugar-ethanol production process raises the demand for sugar, leading to increases in sugar prices. Whether this commercialization occurs or not depends on oil prices. When oil prices rise, then biofuels become more attractive, elevating the demand for ethanol. For example, in the first half of 2008, sugar prices increased by 22% in response to rising oil prices.
Farmers in the United States have formed cooperatives that enable farmers to own their processing facilities and build them near sugar production sites. This process of vertical integration also enable farmers in the US to move closer to economies of scale. While the formation of cooperatives decrease processing and transportation costs, they give US farmers more power over the price of sugar. For example, in 2002, cooperatives controlled 82% of sugar beet production in the United States, giving them significant power over the selling process. Combined with strict government policies, sugar producer cooperatives have kept sugar prices in the United States two to three times prices within other countries. Cooperatives also play an important role in deciding the course of sugar-to-ethanol commercialization since they have control over initial processing stages.
Public health concerns regarding obesity, heart disease and diabetes (see obesity and cardiac disease), particularly in the United States, decrease the demand for sugar-based products. As a result, consumers turn towards sugar-free foods as well as sugar substitutes such as high fructose corn starch. From 2005 to 2008, revenues of the artificial sweetener industry grew by around 8%. The industry is estimated to be worth $3B globally. In comparison, the market size of domestic sugar is around $2.3B ($900M for cane sugar).
Macroeconomic trends that affect the prices of sugar include world-wide income and population growth. When more people are able to afford sugar-based foods, the demand for sugar rises, driving up sugar prices. Important regions of such growth are Asia, North Africa and the Middle East. Sugar consumption in developing countries has grown at around 1.8% per year.  The price and availability of substitutes in developing countries also affect sugar prices. Sugar substitutes include high-fructose corn syrup, starch and artificial sweeteners. Many developing countries are consuming more artificial sweeteners in place of sugar as a result of higher prices and health concerns.