Sugar cane is the main source for the approximately 175 million tonnes of sugar produced each year (with sugar beets following in second place). Most sugar cane is grown by small-scale sugar farmers, who often face extreme poverty, in the tropical areas of least developed and developing countries.
Sugar production increases over a 3-4 year period, reaches a high, which in turn, results in lower sugar prices. Lower sugar price and increased sugarcane arrears results in lower sugarcane production for the next 2-3 years. And the sugar prices shoot up and the area under sugarcane rises during the next season.
Sugar trading in Cambodia is not easy as its price affects the budget of common man in the country hence; it is a politically sensitive commodity. Currently all aspects of sugar industry be it production consumption or sales is controlled. However growing market pressure has made government look into partially decontrol the industry.
What makes Sugar good investment?
Sugar is a broad commodity; it is produced and consumed across the country. The consumption is by wide spectrum of end users, ranging from an individual to a cola maker to a street based sweet maker.
Sugar futures are actively traded in Cambodia derivative markets that allow for risk management to the producers as well as consumers. By-products of Sugar molasses and bagasse are used in producing alcohol (rectified spirits), ethanol and energy generation.