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
It’s really difficult for a lot of people to really conceptualize just how cheap bulk agricultural goods are.
That’s because a lot of the cost that we consumers end up dealing with is largely transportation, storage, and a retail mark-up.
For example, a *tonne* of corn is worth about $30. A tonne of raw sugar cane is worth about $50. A big part of the reason agricultural products are so cheap is two fold. In richer countries it’s a combination of high levels of automation and low paid migrant workers depending on the product, not all of them rely on that but a lot do and in poorer countries it’s just low wages (so…exploration)
Also your numbers are way off. It takes about 10 kg of sugar cane to make 1 kg of table sugar. That means the raw sugar cane cost for a kg of processed sugar is about 50 cents.
As for water well that’s a whole other…thing. Right now that’s virtually free, but only because most places are using water at an unsustainable rate.
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