Sugar Makes For a Sweet Commodity Investment

Everyone is looking for a sweet deal and if you’re looking for a commodity investment that makes a literal interpretation out of sweet deal then perhaps you should consider sugar. It’s just out there enough to work and you may be surprised to learn that sugar can be traded as a commodity like any other on the futures market; however it would be a mistake to treat it as just another commodity investment, take my advice. The sheer amount of foodstuffs and products that use sugar make this commodity on par with demand with some of the highest technology commodities available.

The History of Sugar as a Commodity Investment

Sugar is believe to be cultivated as early as 6 millennia ago when man would have to chew raw sugarcane in order to get a taste of the sweetness locked away inside. An ancient example of capital commodity investment is Brazil, which features as one of the top producers since settlers brought it to be farmed; by 1540 over two thousand sugar mills existed in Brazil. Sugar has two sources of production in sugarcane and sugar beet; the difference is that sugar beet is largely grown in non-tropical climates while sugarcane is a tropical vegetation. When it comes down to the business of commodity investment with sugar, advisors aren’t easy to come by because it is not openly traded on the market and largely subsidised by the country of origin; not to mention a less popularised commodity.

Commodity Investment

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The Market for Sugar

About twenty percent of the total sugar supplies end up in what is called the dump market and this market is what essentially makes up the future markets of sugar; although it doesn’t cover the costs of distribution, refinement or storage. Hardly mentionable as far as tips for commodity investment are concerned by sugar is obviously subject to supply and demand factors. With sugar, the characteristic of it as a crop factors in heavily to the production; this does make tracking the success rate of any given cultivation period difficult. The demand for sugar centres around that of food and related products. As far as commodity investment strategies are concerned, the biggest markets for that are Russia, China, Japan, the EU and the US, but this is fairly logical and easily enough to deduce.

Sugar in Future Markets

Future markets are the best way to invest in sugar and many contracts exist that yield very good results. The most important thing you’ll do before you start making candy from sugar investment is that research is key because government interventions are happening constantly and can influence the return on investment for better and worse. The best way forward for new investors is to go the route of future markets and while there is no clear best commodity investment, all reports are that sugar is doing well for those that take a chance on it. It’s fairly surprising to most that sugar is a commodity investment at all, but sometimes the lesser known paths yield the best results.

Eugene Calvini is a writer and forex commentator on topics any ECN forex brokers would be interested in; he enjoys sharing his tips and advice with the internet.

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