Sugar is the latest rage in the investment world. Globe and Mail reports that it has reached its highest peak in ages. The peak is the result of high demand and low supply. Did you know that India is the 2nd leading producer and main consumer of sugar? Currently, the increase in sugar is caused by climatic conditions experienced in the country. According to the International Sugar Organization, the world is short of eight million tons this year.
What’s the result of the shortage? It has led to an increase in price of sugar and candies. Wall Street has also taken advantage of the situation for profitable reasons. Futures for raw sugar have doubled, and stocks related to the commodity have risen. Yet, the effect doesn’t just stop at food and investments. It keeps going straight to the gas pump. Globe and Mail reports that 60% of ethanol is produced by sugar, which will lead to a spike in gas prices. (And don’t we love those!) Also, corn will experience a price increase due to higher demand on oil for commodity and energy purposes. Therefore, you’re likely to be effected in some way.
While its long-term state is anyone’s guess, several see investment potential in the commodity. Some investors hold the belief that sugar will continue to increase on the market, leading to a profitable future. For the moment, the odds are currently in the investor’s favor. Sweet opportunity or not? You decide.
*Image courtesy of Trinette Reed.
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