Sugar Trading, a sweet investment
People usually picture something quite different than sugar when thinking of financial markets. Sugar, however, has some great profit opportunities to offer. Here’s a quick guide on the basics of sugar trading.
The main players on the sugar market are sucrose, fructose and lactose. There are two main sugar raw materials – sugar cane, grown in tropical countries, and sugar beet, grown in countries with milder climate. Like other commodities, sugar has its own ticker and symbol for market trading.
There is continuous upward trend on the sugar market, which makes it perfect for addition to a balanced portfolio. Of course, as with any other commodity, there are fluctuations, but the sugar demand levels maintain high levels and keeps on growing. After all, sugar is a key ingredient in a big part of the food industry, and that means that demand will continue to grow.
The supply/demand ratio is key to all commodities markets. Sugar crops are highly dependent on nature, climate, diseases and other vital factors for growing them such as occurrence of draught, quality of the soil, insect migration, etc.
In addition to being used in the food sector, sugar also has some industrial and pharmaceutical applications. But since the food industry is the main sugar user, it is important to stay up to date with the developments on large food markets, for example in USA, EU and China, and to apply informed trading strategies.
One of the unusual non-food related sugar uses is ethanol production, and ethanol market is interesting and extraordinary space for sugar trading, since ethanol is considered a possible alternative to fossil fuels. Currently, the biggest ethanol producer is Brazil, who holds the first place in other commodity as well – coffee. Since ethanol is fully sustainable, trading with it allows you to enter the green markets.
In addition to everything said so far, the fact that there is ETF tracker for sugar is another evidence that it is really interesting commodity with some great profit opportunities, including futures options. And its placement in sustainable development and the food industry is sure to keep its steady upward trend for a long time ahead. All this makes investing in sugar to diversify your portfolio an idea worth exploring.