Slowing sugar sales are causing a massive worldwide glut

Sugar stockpiles are poised for a record as slowing demand growth and surging production creates the worst-performing commodity of 2018.

Consumers have become increasingly wary of the health impact of their sweet tooth, and companies from cannedfruit maker Del Monte Foods to snack-food seller Mondelez International are touting products made with less sugar. While global consumption is still rising, the pace of growth has slowed to an average 1.4 percent in recent seasons, down from 1.7 percent over the past decade, according to researcher Green Pool Commodity Specialists.

That’s coming at a time when production is booming, especially in India, the world’s No. 2 producer. Farmers in Thailand are also collecting massive crops. World stockpiles are set to swell to the highest ever this season and stay near the record next year, according to the U.S. Department of Agriculture. Sugar futures in New York have already slumped 25 percent in 2018. That’s the biggest loss on the Bloomberg Commodity Index, which tracks returns for 22 components.

“Unless there’s a weather issue, it doesn’t look that the bulls have any hope for a sustained rally,” said Donald Selkin, a New York-based chief market strategist at Newbridge Securities Corp., which oversees about $2 billion. “Demand is going to remain less than what’s been in recent years. The price is doomed to stay low for a while.”