How Sweet It Isn't In the Sugar Trade

Sugar shortages are leaving a bitter aftertaste. Bad weather and rising energy costs have pushed raw sugar to its highest world price in a decade, about 15¢ a pound. In the U.S., a protectionist trade policy has made the situation even worse. "The 1 million-ton gap between sugar supply and demand will only grow more dire," says Sergey Gudoshnikov, a senior economist at the International Sugar Organization.

None of sugar's major producers have gone unscathed. Brazil, the world's largest exporter, is diverting more of its drought-shortened crop to the production of ethanol, a cheaper alternative to imported oil. In Thailand, the...

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