The sugar exchange traded note (ETN) has taken its lumps this year before rallying back in the last moth. Now what? The prognosticators differ on where prices go from here.
There had been speculation that bumper crops in Brazil and India, the world’s biggest producers, will boost supplies next year and pressure prices downward as a result, explains BusinessWeek. But not before prices rally 12% in the fourth quarter, based on Asian and Middle Eastern demand. Brazil forecasts even more: sugar cooperative Copersucar SA said sugar prices could surge 30% this on robust demand, weak crop yields and transportation issues.
Crop damage in Brazil and India sent prices skyrocketing last year.
The Financial Times reports that Thailand is in the market to buy sugar for the first time in 30 years. The fact that Thailand is buying sugar is an example of how hard to come by the raw commodity is – for now. [What You Should Know About ETNs.]
The ETF Professer reports that the sugar ETN is thinly traded, but light volume or not, SSG has turned in a solid performance in the past month, adding 6% while the S&P 500 is down 4.5%. [Why Investors Like Agriculture ETFs.]
For more stories about sugar, visit our sugar category.
- iPath Dow Jones UBS Sugar TR sub-Index (NYSEArca: SGG): Watch the trend line; SGG is still 11.4% below its 200-day moving average
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.