The UK has two major sugar producers who operate using two different sugar products; sugar cane, and sugar beet. Both import and export large volumes of product based on deep relationships with several key producers and buyers. Changes to the UK’s regime of tariffs and quotas governing sugar cane, sugar beet and refined sugars are all likely as Britain reshapes its trading relationship with the EU and the world after Brexit. This potentially offers huge opportunities to UK-focused exporters and importers of sugar and sugar products. Global trade of sugar is relatively liberalized, accounting for around 20-25% of global aggregate demand, compared to an average 10-20% for most commodities. South American nations account for the majority of sugarcane production; the USA operates a strict tariff and quota regime in support of its domestic beet growers; and South East Asian nations import and export huge volumes of refined sugar, with Indonesia leading the way.

Conducting transactions across international borders can be risky and uncertain for sugar traders, as they usually deal with suppliers in different legal and regulatory jurisdictions. This increases the financial risks associated with the transactions, be that simple buyer non-payment upon dispatch of goods leaving suppliers with large legal bills and lengthy waits to recover payment, or supplier regulatory negligence landing buyers with large fines or tariff bills. Trade finance products can help support these profitable transactions not only by providing the finance to allow firms to invest in them, but by deploying specific trade finance tools to mitigate these risks and ensure transactions are concluded successfully.