If sugar costs $1.70/kg, but takes 100kgs of sugarcane and over 2000L of water to produce that 1 kg, how is the end product profitable?

Question

If sugar costs $1.70/kg, but takes 100kgs of sugarcane and over 2000L of water to produce that 1 kg, how is the end product profitable?

In: 300

Answer 1

When it comes down to it, what costs money is *people*. Sugar is produced on a vast, industrial scale, with huge machines doing all the work, and only a handful of machine operators and technicians supervising the processing of thousands of tons of sugar a day.

Take a look at this video of sugar production from sugar beets (which are more efficient in colder climate than sugar cane), and look at how few people are involved.

[https://www.youtube.com/watch?v=hizXcJCqmoQ](https://www.youtube.com/watch?v=hizXcJCqmoQ)

Why is sugar so cheap? Robots.