Sugar prices are overall, continuing to recover following their December crash into a bear market, but the path continues to be volatile with prices moving in different directions on almost a daily basis. This volatility has increased since sugar climbed to a seven week high on Jan.4.
Sugar futures had an impressive run through much of last year, peaking at 24.10 cents per lb. in late September, the commodity’s highest price since April 2012. Then, the commodity saw a sell off and officially fell into a bear market in December, reaching 18.02 cents per lb. A bit of a recovery ensued and sugar finished 2016 at 19.51 cents per pound. Sugar futures started 2017 on a positive note, the commodity scored a seven week high on the 4th, with futures bouncing between gains and losses as traders adjusted their positions. Recently, sugar was at 20.55 cents per lb.
The raw sugar market attracted a lot of speculators in 2016, and with the market still flooded by speculative buyers, volatility has become a common occurrence. Overall, sugar prices were supported in 2016 from a tightening supply chain, but at the end of the year updated forecasts that called for a lower deficit than previously expected caused some unwinding of positions.
This year, the upside was sparked from concerns of a cane shortage in India, the world’s second-largest producer. This news was enough to spark a technical rally, with recent import data from Indonesia supporting continued, strong demand for the commodity.