A sugar exchange traded note (ETN) may prove to be really sweet, as global futures prices for the commodity have risen so sharply that some food manufacturers have issued warnings.
The world is facing sugar shortage so alarming that the Agriculture Department has been asked to ease quotas on imports. Since the price of sugar has gone up substantially, manufacturers are warning that run-up could impact grocery shelves, reports Jerry Hrisch for The LA Times.
Analysts say those fears are overblown and that it’s just a tactic on the part of manufacturers to get the United States to take down trading barriers.
On world markets, sugar prices are up 72% for the last six months. Among the pressures on the supply of sugar include bad weather in the sugar producing region of India, the Brazilian sugar cane diversion to make ethanol and the rise of the global sweet tooth.
If the prices are reflected on grocery shelves, it may not be for awhile. Many large food manufacturers likely bought sugar futures after prices began to climb.
- iPath Dow Jones AIG Sugar ETN (SGG): up 63.4% year-to-date
For more stories about commodities, visit our sugar category.
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.