Sugar is frequently traded via futures, which are contracts in which you agree to exchange a predetermined amount of the underlying commodity at a predetermined price on a predetermined date. Futures markets, such as the Intercontinental Exchange, trade these contracts (ICE).
There are alternative methods to get involved in the sugar industry. Whether you wish to possess the tangible assets or not will determine your decision. You might elect to trade or invest in the shares of a sugar-producing corporation like Suedzucker, for example. Its stock price is greatly influenced by the price of the commodity, although it can be a good deal when compared to trading sugar. You might also use sugar exchange-traded funds (ETFs) (ETFs).
What is the best way to invest in sugar futures?
How to Make a Sugar Investment
- Stocks in sugar companies should be purchased. Another way to become sticky with sugar is to buy stock in a firm that sells it or is engaged in its production.
What is the best way to trade sugar?
In the manufacturing and sale of sugar, there are hardly no pure-play worldwide public businesses. Imperial Sugar was a publicly traded corporation until it was bought out and went private in 2012.
Traders might buy shares of Bajaj Hindusthan Ltd, India’s largest sugar producer, on the Bombay Stock Exchange or derivatives through a broker in your nation. Traders interested in sugar should check into businesses like HSY, CSAN, and TR on the NYSE.
Contracts for Difference (CFDs)
The use of a contract for difference (CFD) derivative instrument is one approach to trade sugar. Traders can speculate on the price of sugar using CFDs. The difference between the price of the shares at the time of purchase and the current price is the value of a CFD.
Sugar CFDs are available from a number of regulated brokers throughout the world. Customers make a deposit with the broker to serve as margin. CFDs offer traders the ability to gain exposure to sugar prices without having to buy shares, ETFs, futures, or options.
Sugar is traded on what exchange?
The organic chemical molecule sucrose, one of several related compounds known as sugars, is the white crystalline material known as “sugar.” Glucose, dextrose, fructose, and lactose are some of these sugars. Sugars are all part of the wider group of molecules known as carbohydrates, and they all have a sweet flavor. Because it is made up of one molecule of glucose and one molecule of fructose, sucrose is referred to as a double sugar. While sucrose is found in many plants, sugarcane (Saccharum officinarum) and sugar beets have the largest concentrations (Beta vulgaris). Sugarcane has a sugar content of 7 to 18 percent by weight, while sugar beets have a sugar content of 8 to 22 percent.
Sugarcane is a perennial grass that belongs to the grass family.
Sugarcane is grown in tropical and subtropical climates worldwide, generally between the Tropics of Cancer and Capricorn.
It thrives in hot, humid conditions with plenty of rain followed by a dry season.
Florida, Louisiana, Texas, and Hawaii are the top cane producers.
Sugarcane is cultivated commercially from cuttings or sections of the stalk rather than seeds.
Sugar beets are annuals that are cultivated from seeds in moderate or colder areas.
Moderate temperatures and well distributed rainfall are ideal for sugar beets.
In the spring, beets are planted, and in the fall, they are harvested.
The sugar is found in the root of the beet, yet beet and cane sugars are identical.
Sugar beets are mostly grown in Europe, the United States, China, and Japan.
Minnesota, Idaho, North Dakota, and Michigan are the states that produce the most sugar beets.
White sugar is made from sugar beets, and only a small amount of raw sugar is produced.
Sugar beets and sugarcane are grown in more than 100 nations worldwide.
Sugar beets account for around 25% of total sugar production, while sugar cane accounts for the remaining 75%.
Sugar output from cane has been on the rise in comparison to sugar production from beets.
The relevance of this is that sugarcane is a perennial plant, whereas sugar beet is an annual, and as a result of the longer production cycle, sugarcane production and the sugar extracted from it may be less susceptible to price fluctuations.
The ICE Futures U.S. exchange, the Bolsa de Mercadorias y Futuros (BM&F), the Kansai Commodities Exchange (KANEX), the Tokyo Grain Exchange (TGE), and the ICE Futures Europe exchange all trade sugar futures.
The ICE Futures U.S. exchange trades raw sugar, while the ICE Futures Europe exchange trades white sugar.
The No. 11 (World) sugar contract on the ICE market is the most actively traded.
The No. 11 contract requests for the supply of 112,000 pounds (50 long tons) of raw cane centrifugal sugar from any of 28 foreign nations and the US.
The No. 14 sugar contract (Domestic) is likewise traded on the ICE exchange, and it calls for the delivery of raw centrifugal cane sugar in the United States.
White sugar futures are traded on the London International Financial Futures Exchange and require the delivery of 50 metric tons of white beet sugar, cane crystal sugar, or refined sugar of any origin from the current crop.
Supply – World centrifugal (raw) sugar output is predicted to reduce -3.2 percent yr/yr to 174.140 million metric tons in the 2019/20 marketing year (October 1 to September 30).
Brazil is predicted to be the world’s largest sugar producer in 2019/20, accounting for 16.9% of global production, followed by India (16.8%) and the European Union (10.3%).
Sugar production in the United States is predicted to drop -3.2 percent year over year to 8.159 million metric tons in 2019/20.
Cane sugar output in the United States is predicted to increase by 2.5 percent to 4.129 million short tons in 2019/20, while beet sugar production is expected to increase by 1.0 percent to 5.005 million short tons.
In 2019/20, world ending stocks are predicted to climb by +5.3 percent year on year to a new high of 55.501 million metric tons.
Demand – In 2019/20, global domestic consumption of centrifugal (raw) sugar is predicted to increase by 0.8 percent year on year to 174.684 million metric tons, a new high.
Sugar disappearance (consumption) in the United States is predicted to be nearly stable year over year in 2019/20, at 12.340 million short tons.
Trade – World centrifugal sugar exports are predicted to drop -5.3 percent year on year to 54.856 million metric tons in 2019/20, down from a record high of 64.262 million metric tons the previous year. Brazil, Thailand, and India are the world’s top sugar exporters.
Sugar exports in the United States are predicted to remain flat year over year in 2019/20, at 25,000 short tons, down from a three-decade peak of 422,000 in 2006/07. Sugar imports into the United States are predicted to drop 5.2 percent year on year to 2.816 million metric tons in 2019/20.
The CRB Yearbook, the single most comprehensive source of commodity and futures market information available, provides information on commodities. Its sources – government reports, private industry reports, and trade and industry associations – are reliable, and its historical breadth for commodities data is unparalleled. The Barchart product range includes the CRB Yearbook. Please come to us for all your commodity data need.
Is there an ETF for sugar?
Overview of the Sugar ETF Sugar ETFs manages $54.56 million in assets through two ETFs that are traded on US exchanges. 1.17 percent is the average expense ratio. ETFs that invest in sugar are available in the following asset classes: Commodities.
What exactly is the distinction between sugar 11 and sugar 16?
- The InterContinental Exchange (ICE) trades sugar futures in the contract months of January, March, May, July, and October.
- Sugar futures are traded as sugar no. 11, with prices reported in US dollars per pound and a $0.0001 per pound minimum variation.
- Sugar no. 11 is the most widely traded commodities futures contract, whereas sugar no. 16 is used to supply cane sugar from the United States or other duty-free countries in bulk to New York, Baltimore, Galveston, New Orleans, or Savannah.
- Sugar is a major source of ethanol production, hence crude oil futures prices and ethanol demand have an impact on sugar futures prices globally.
What exactly is sugar #16?
The Sugar No. 16 contract meets the hedging needs of sugar producers, end consumers, and merchants in the United States. The contract specifies the price of physical delivery of raw cane sugar cultivated in the United States (or foreign origin with duty paid by the deliverer) to one of five U.S. refinery ports chosen by the receiver.
Is sugar a valuable resource?
Sugar products are an essential source of food energy in most regions of the world, and they play a large role in human diets. It’s a soft commodity, which means it’s cultivated rather than mined, and it’s classified as tropical. Sugar is prized not only for the sweetness it imparts to our food, but also for its ability to preserve and ferment it.
Sugar, on the other hand, isn’t solely used in the food business. By-products of sugar production include beet pulp and molasses, which can be used as livestock feed, as well as ethanol, which can be used as a biofuel.
What is sugar #11?
Sugar No. 11 is a physical delivery of raw cane sugar futures contract. The Sugar No. 11 futures contract is widely regarded as the global standard for trading raw sugar.
What is the cost of a sugar futures contract?
Specifications for the Market 1/100 cents per pound, or $11.20 per contract Raw centrifugal cane sugar with an average polarization of 96 degrees.