Invest in sugar (CFD)!

Analyse the sugar price before investing

Invest in sugar (CFD)!

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Among the food commodities that you can invest in on the stock markets we find sugar. This commodity, previously only used by the wealthy, is nowadays one of the most traded assets on the markets worldwide. But before investing in this commodity it is of course necessary to possess a thorough knowledge of this asset, its market and the factors that could influence its price. In this article we shall reveal the factors that you should consider when completing your analyses of the sugar price on the New York stock market.
Invest in sugar: in brief
  • The price of sugar is quoted on the ICE market in New York and Europe, as well as on the LIFFE market in London.
  • You can invest in sugar using contracts and derivatives such as ETFs and CFDs.
  • It is essential to analyse the price of sugar using technical and fundamental analysis before investing
  • Sugar trading is available online to investors through brokers.

Elements to consider before investing in this asset

Analysis N°1

Firstly, you should of course monitor movements in the American dollar rate on the foreign exchange market. It is important to remember that the price of sugar is quoted in American dollars and therefore the value of this currency will influence demand for this commodity from other countries that use other currencies and wish to benefit from an advantageous currency exchange rate. Variations in the Brazilian currency, the Real, should also be followed closely given that this country is the primary producer of sugar worldwide.

Analysis N°2

Another factor to follow when completing this analysis concerns public finances as certain prices are implemented with the objective of protecting the producers by sometimes encouraging them to produce more sugar than is necessary for the market. Therefore, subventions could exert an influence on supply and demand and therefore indirectly impact the price of this commodity.

Analysis N°3

We would also monitor climate change and meteorological events that could impact the harvest. It should in fact be remembered that the production of sugar is highly sensitive to climate and requires a lot of sun and rain. Unfavourable meteorological conditions could therefore negatively impact this production.

Analysis N°4

In the same way, health worries relating to sugar and its negative effects on health could also influence the market. Health recommendations relating to high sugar consumption could seriously impact the long term demand for this commodity.

Analysis N°5

Finally, another factor to monitor closely is the demand for ethanol as sugar is also used in the production of this alternative form of energy.

Analyse the sugar price before investing
Invest in sugar (CFD)!
{etoroCFDrisk}% of retail CFD accounts lose money -
Invest in sugar (CFD)!

What should I know before investing in sugar?

Firstly we shall take a few moments to examine sugar and its market in a little more detail. In fact, sugar is one of the food commodities that is the most highly traded on the stock markets worldwide and its market represents nearly 52 billion dollars at present.

Sugar as a food is actually produced in two different ways, from sugar cane or sugar beet. Regarding the demand for sugar, it is also important to know that sugar is in fact far more used in industry than simply as a sweetener for other foods.  Sugar is also used in beauty products for example and as an alternative energy to fossil fuels such as oil.

It is exactly this significant polyvalence of sugar that makes it such a highly appreciated asset for investors and also explains the high liquidity of this market. In fact, the sugar market is a large market and so the volatility is also very high.

Of course, this volatility also calls for prudence as it could be said to be synonymous with risk.

It can also be beneficial to be aware of sugar production around the world. In fact, this is produced mainly in certain particular countries and now we shall briefly summarise these high sugar producing countries as well as the comparative amounts they produce:

It should be noted that sugar, like other agricultural or food commodities, is quoted on the American NYMEX stock market. Its quotation is therefore in American dollars.

Invest in sugar (CFD)!
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On which markets is the price of sugar quoted?

Sugar is mainly quoted on two stock exchanges:

1. ICE Futures US (formerly NYBOT)

2. Intercontinental Exchange (ICE) Europe

Other markets


How to invest in sugar?

Sugar is an important commodity that is used in many food and beverage products. As an investment, sugar can offer portfolio diversification, as well as attractive return potential. There are several ways to invest in sugar, each with its own advantages and disadvantages, and the choice of one or other of these methods will depend primarily on your level of risk aversion.

Firstly, investors can invest in sugar futures. Futures contracts are agreements to buy or sell a specified quantity of sugar at a pre-agreed price at a future date. Sugar futures are traded on commodity exchanges such as the NYMEX and ICE. Futures contracts can offer potentially high returns, but they also carry a high risk due to price volatility.


Invest in sugar with ETFs

Another option is to invest in sugar trackers or ETFs. These funds allow investors to invest in sugar without having to trade directly in the commodity markets. Trackers and ETFs invest in sugar futures or in companies involved in the sugar industry. They can offer diversified exposure to sugar, which can be an advantage for investors seeking to minimise risk.

Investors can also invest in shares of companies involved in the production or distribution of sugar. Shares in sugar companies are traded on stock markets and can offer potentially higher returns than trackers or ETFs. However, individual shares are riskier than diversified funds, as they can be affected by company-specific factors.


Trading sugar with CFDs

Finally, investors can invest in sugar CFDs. CFDs are financial instruments that allow investors to speculate on sugar price movements without having to physically buy or sell sugar. Sugar CFDs are traded on online trading platforms and offer great flexibility, as investors can take up or down positions. However, CFDs also carry high risks due to the leverage that can magnify gains, but also losses.

Invest in sugar (CFD)!
{etoroCFDrisk}% of retail CFD accounts lose money -

How to achieve a good technical analysis of the sugar price?

Before investing in sugar, the first analysis that we shall examine here is the technical analysis of the sugar price. This in fact consists of studying the stock market charts of this asset in order to identify the significant rising and falling movements.

For this we use several different types of technical indicators such as the moving averages, the MACD indicator, the pivot points, and the support and resistance technical indicators as well as the Bollinger Bands.

These indicators can be displayed directly on the charts available from online brokers but of course rely on your correct interpretation of the data which requires a certain prior knowledge.  Their objective is to provide an indication as to the direction of the trend as well as its strength, the volatility of the market and also the major psychological thresholds which can lead to a reversal or acceleration in the trend.


Historical trends in the price of sugar

The historical trend in the price of sugar has been marked by numerous fluctuations. Here are a few key points:

19th century:

20th century:

21st century:

Here is a table showing recent trends in the price of sugar on the New York ICE exchange: 

Year Average price (cents per pound) Change on previous year
2014 18.5 -2.6%
2015 15.0 -19.0%
2016 17.0 +13.3%
2017 20.0 +17.6%
2018 18.0 -10.0%
2019 13.5 -25.0%
2020 14.0 +3.7%
2021 16.0 +14.3%
2022 17.5 +9.4%
2023 18.0 +2.9%

Frequently Asked Questions

How has the global consumption of sugar grown over time?

The global consumption of sugar is currently around 170 million tons per year and this figure grows by around 2% every year. This rise can be explained by the demographic growth, the increase in revenue per person in various countries and the development and changes in modern eating habits. Over the last ten years the global consumption of sugar has therefore risen by around 30 million tons per year.

Where and how to invest in the price of sugar?

There are various ways to invest in sugar on the stock markets. The more basic is of course to simply speculate on the price of this agricultural commodity using specific tools or derived investment products. It is also possible to invest in sugar by taking position on the price or buying shares directly on the stock market of companies in this activity sector which are quoted on the stock markets.

What are the prerequisites for trading sugar online?

Understanding the market is essential. You need to analyse supply and demand, contract types and volatility. Choosing a reliable broker is crucial. Opt for a regulated broker with an intuitive platform and competitive fees. Develop a solid strategy. Define your objectives, use analysis and a risk management plan. Gain experience gradually. Start with a demo account, trade small positions and learn continuously. Get the right tools. You need a computer, trading software, real-time data and a trading account.

Which analyses are required for studying the price of sugar?

Among the necessary analyses to implement for studying the price of sugar and its movements we particularly note the technical analysis as well as the fundamental analysis. In fact, the technical analysis enables you to learn the strength of a trend as well as the volatility of a market whereas a fundamental analysis is based on the study of the events and exterior factors that could influence the supply and demand for sugar.

Invest in sugar (CFD)!
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