11 Best Sugar Stocks to Buy Now

Faiq Zafar
11 min read

In This Article:

In this article, we shall discuss the 11 best sugar stocks to buy now. To skip our detailed analysis of global food and agribusiness trends and the sugar industry, go directly and see 5 Best Sugar Stocks to Buy Now.

According to a report by McKinsey and Company, food and agribusiness have an enormous economic and social footprint. The industry is worth more than $5 trillion and it represents nearly 11% of global consumer spending, 40% of employment, and nearly 30% of greenhouse gas emissions. If current trends persevere, caloric demand is projected to increase by nearly 70% by 2050. And although resource constraints, like unbridled water demand in 2030 and the rampant degradation of arable land, continue to hamstring the sector, demand for human consumption is likely to double by 2050. To capitalize on this opportunity, investors are pouring money into agribusiness in an effort to capture value from the intrinsic technological innovation and discontinuities in food and agriculture. Evidently, global investments in the industry have tripled since 2004, to more than $160 billion in 2020, according to the report. On average, the agribusiness sector has generated greater total returns to shareholders than other industries historically.

The production, processing, and marketing of sugar is an enormous part of the global agribusiness sector, with over 210 million tonnes of sugar produced in 2021. As of 2022, there are more than 123 sugar-producing countries in the world, with the largest players being Brazil, India, Thailand, China, and the United States. However, only 30% of the global produce is traded on the international market. As little to no major sugar producers are listed on major U.S. stock exchanges, investors must deploy a unique approach to capitalize upon the sugar market. They must seek companies which produce sugar along with other agricultural products or as part of a diversified portfolio, like Bunge Ltd. (NYSE:BG). In addition, several notable consumer staple stocks and food companies, like The Hershey Company (NYSE:HSY) and PepsiCo Inc. (NYSE:PEP), manufacture products which require an enormous quantity of processed sugar.

Global Sugar Industry: Key Market Insights

The global industrial sugar market is projected to grow at a CAGR of 2.72% from $38.58 billion in 2022 to nearly $46.7 billion in 2025. Recovering steadily from the unprecedented impact of the COVID-19 pandemic and unfavorable weather conditions across all regions, the market is undergoing prominent growth all around the world due to certain drivers such as the rampant expansion of food processing activities in developing markets such as Asia Pacific, the Middle East, and Africa. Another significant growth driver for the industry is the global increase in demand for alcoholic and non-alcoholic beverages. Furthermore, skyrocketing demand for baked goods, yogurt, and confectionary is anticipated to drive the sugar market growth in the 2022-2025 analysis period. Most of the projected growth in sugar production is expected to come from Brazil and India, the two leading producers and exporters of sugar in the world; both countries account for more than 40% of global sugar production collectively. Moreover, as overall income increases and urbanization in developing countries begins to pick up, global average per-capita consumption is also expected to increase.

Recommended Stories