Commodity Fundamentals: How to Trade the Precious Metals, Energy, Grain, and Tropical Commodity Markets

CHAPTER 17

Sugar

OVERVIEW

Sugars, which are known for their sweet taste, are the simplest molecules that can be identified as a carbohydrate and come in multiple forms, including sucrose, dextrose, fructose, and lactose. The form of sugar most commonly found in processed foods—sucrose—is made from one molecule of glucose and one molecule of fructose. The two primary sources of sucrose are sugarcane and sugar beets.

Sugarcane is a tropical grass that is thought to have originated in New Guinea and spread throughout the Pacific Islands to India. The first known process for extracting sugar from sugarcane was developed in India about 500 BCE and consisted of pressing out the sugarcane's juice and boiling it into crystals.

With the Persian invasion of India by Emperor Darius in 510 BCE use of sugarcane spread across Persia. But it was only with the Arab invasions of Persia in 642 CE that the secret of sugarcane production penetrated beyond Persia to Spain, North Africa, and—with the onset of the Crusades in the 11th century—Europe.

Initially, Europeans were dependent on imports from tropical regions of Asia and the Middle East for their sugar, which was a luxury item costing the equivalent of $100 per kilo. Then in 1493, Columbus carried cuttings of sugarcane with him to the West Indies, where cane thrived. And a little over a century later, the Portuguese introduced sugar production to Brazil. In 1625 the Dutch carried sugarcane from South America to the Caribbean Islands. These ...