Sugar Prices Facing New Contender

Just when we thought that we'd figured out the story on sugar prices, there's a new player in the game.

Well, technically the EU isn't a new player, but their decision to export higher quantities of sugar this year is a new play on a market usually dominated by Brazil, Thailand, and Australia.

Historically the EU has been limited in their exportation of sugar by the World Trade Organization, but in response to the sugar shortage we've been facing in the last 6 months and more, they've decided to send more.

In fact, in a move that BusinessWeek predicts will definitively impact worldwide sugar prices, the EU approved the export of 500,000 metric tons of sugar above the WTO's annual limit.

Now, that's a lot of sugar cubes and soda pops!

Brazil, Thailand, and Australia have asked the EU to abandon their plan to ship the extra sugar, no doubt influenced by the fact that they'll lose money on the subsequent lowering of sugar prices.

However, whether or not the WTO will do anything hasn't been addressed, particularly with sugar prices double their usual rates.

It's still too early to say what effect this will really have on sugar prices, and it's likely to start to push sugar prices down a bit, even if it doesn't make the price bubble "pop."