Sugar Isn’t a Sweet Trade Anymore
Bakers, rejoice! The price of sugar is down nearly 45% in nine months.
Our favorite sweetener is in a major bear market, as you can see from the chart below:
This trend could continue into 2018 as well. India, the second-largest sugar producer in the world, will increase production this fall. The 2017/2018 crop could be 16% to 20% larger than this year’s 21 million metric tons.
That could prove troubling for sugar producers such as the Canadian company Rogers Sugar Inc. (Toronto: RSI). According to Bloomberg, Rogers Sugar’s earnings will fall from $102.9 million in 2016 to $84.8 million this year. That’s an 18% decline, which will hurt its share price. This is not a good time to be long sugar, but it’s a great time to be a baker.
Editor, Real Wealth Strategist