Food products are essential for every single person on the planet. Sugar is a very important part of the food industry since the beginning of written history around 9000 years ago. Sugar wasn’t as important as it is right now because people used to add honey before sugar to make the food more appetizing.
As reported by FAO, 24 kilograms of sugar were consumed for every person per year at the end of the 20th century and it was estimated “with the boost in population” that these figures are going to increase to at least 25.1 kilograms per person in 2015. World sugar production reached approximately 168 million tonnes. Brazil dominates the sugar industry in the world with 20% of the world production and accounts for 35.3% of global sugar exports followed by Thailand 12.2% and India 5.5%.
Sugar is grown from two different main crops: sugarcane and sugar beet. The United States is the major importer of sugar with 8.1% of total sugar imports in the world followed by China 7.8%.
Most of the world sugar supply is being consumed in the country of origin, therefore, the precise supply and demand figures of sugar can not be determined.
The price of sugar is influenced by many factors and is oftentimes exposed to serious price fluctuations in a short period of time. These factors include: The weather conditions: like other main commodities that can be influenced by changing the weather and affect the supply volume. Political events: as mentioned earlier that the main exporters are mostly emerging markets, for that reason any political tensions can affect the sugar price.
Relative commodities value: it is a known fact that lands on which sugar corps grows can be used for other commodities as well such as bananas. In case of a boost in bananas price, farmers would abandon growing sugar in favor of the other commodity. Ethanol production: as the global warming issue rises, many countries seek an alternative clean source of energy such as Sugarcane Ethanol, that's why a huge portion of sugar production is used in Sugarcane ethanol production.
Online Trading Sugar
In order to trade on sugar, investors can choose between buying/ selling sugar future contracts, or through purchasing the stock to a profit of it and of course through online trading.
If you are curious and want to trade or invest in sugar you should study the market and analyze the sugar price patterns in order to understand the ins and outs of this market.
Make sure you make up a trading strategy before entering the market, use fundamental and technical analysis, be at the top of the book and update your information to the latest.