Harvested from two main sources — sugarcane and sugar beets — sugar is produced in more than 130 countries, with more than 70% of the sugar produced consumed in its country of origin. That’s one heck of a sweet tooth. And one heck of a way to diversity your portfolio. Just watch for sticky risks — investing in commodities isn’t for the faint of financial heart. Beginners can look to ETFs and other less risky avenues of entry into sugar.
1. Buy sugar ETFs.
Worth considering are exchange-traded funds — or ETFs. ETFs trade as shares on exchanges the same way that stocks do. But unlike stocks, they offer access to a variety of assets without needing to put all of your money into one or two companies. ETFs allow investors to minimize risk by diversifying while also taking advantage of the performance and general popularity of a particular sector. Popular ETFs that invest in Sugar No. 11, which is the benchmark in the raw sugar trade based on a futures contract for the physical delivery of raw cane sugar, include:
iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG)
Teucrium Sugar Fund (CANE)
iPath Pure Beta Sugar ETN (SGAR)
Pros
ETFs allow portfolio diversification and risk management.
Lower costs than open-ended mutual funds.
Cons
You relinquish some control over the split of assets.
Terms apply. Cryptoassets are highly volatile. Your capital is at risk. Available in the US, CA, UK and AU
Disclaimer: This page is not financial advice or an endorsement of digital assets, providers or services. Digital assets are volatile and risky, and past performance is no guarantee of future results. Potential regulations or policies can affect their availability and services provided. Talk with a financial professional before making a decision. Finder or the author may own cryptocurrency discussed on this page.
Trade $0 commission stocks, ETFs, and options with as little as $1
After-hours trading available
Earn 4.5% interest on uninvested cash with Gold
24/7 customer support
2. Buy stocks of sugar companies.
Another option for getting sticky with sugar is purchasing stock in a company that sells or is involved in the production of this commodity. A few to keep in mind are:
Choose from a range of stocks, and cash out when you want.
Simple, accessible and versatile access to the market.
Cons
On its own, puts all your eggs in one basket.
3. Buy sugar futures.
A common way to invest in physical sugar, futures contracts are legal agreements that allow you to buy or sell this commodity at a predetermined price at a specified time in the future. Contracts are negotiated at futures exchanges, which are like marketplaces between buyers and sellers, and you must trade on these contracts before they expire. Sugar producers and major sugar buyers often use futures contracts to lock in prices, but investors and speculators can also trade futures. Various exchanges offer contracts on sugar, including the New York Mercantile Exchange — called NYMEX — which is part of the Chicago Mercantile Exchange, and the Intercontinental Exchange. You can get started through a brokerage account that allows futures trading — only a few of the major brokerage accounts enable you to trade futures, as well as some forex trading accounts. Because futures contracts are standardized, one Sugar No. 11 contract always represents 112,000 pounds of raw centrifugal cane sugar. Futures can be extremely volatile, making them a riskier investment than other options. Success comes down to hitting timing and price movement just right.
Pros
Standardized contracts eliminate concerns about a commodity’s underlying quality and quantity.
Investing is accessible through select brokerage accounts.
Cons
Futures are volatile — you can’t predict exactly how prices will fluctuate.
You must act on a futures contract before it expires. Otherwise, it’s worthless.
4. Buy sugar options on futures.
An options contract is an agreement between a buyer and seller that offers the option to buy or sell an asset at a later date and at an agreed price. Because you can’t lose more than you paid for the option, excluding brokerage costs, one benefit is limited personal loss. So, if you’re wrong about the price of sugar, your loss is only what you paid for the option. Also, options are generally far less expensive than buying a futures contract outright. The International Exchange — or ICE — offers an options contract on sugar futures. Check your futures brokerage’s options offerings to see if you can trade it.
Pros
Less risky than sugar futures.
Usually cheaper than futures.
Cons
You must act on options agreement before it expires.
If the option expires out of the money, it’s worthless.
Compare these providers for access to sugar ETFs and more
1 - 10 of 10
What is the Finder Score?
The Finder Score crunches 147 key metrics we collected directly from 18+ brokers and assessed each provider’s performance based on nine different categories, weighing each metric based on the expertise and insights of Finder’s investment experts. We then scored and ranked each provider to determine the best brokerage accounts.
We update our best picks as products change, disappear or emerge in the market. We also regularly review and revise our selections to ensure our best provider lists reflect the most competitive available.
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an advisor or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
How much is sugar worth today?
What factors drive the price of sugar?
Investing in this volatile commodity comes with the possibility of substantial gains — and substantial losses. This is largely due to the number of factors that affect the price of sugar:
Global supply and demand. If farmers expect high demand, they plant more crops, likewise planting fewer crops when demand is weak. If global demand exceeds or falls short of sugar supplies, prices are hit accordingly.
Fluctuations in the Brazilian real. A weak real means greater supply on global markets and lower prices. That’s because when the real is weak, Brazilian farmers produce more sugar for export to countries with strong currencies and greater purchasing power. When the real is strong, they’re likely to sell in the local market.
Government subsidies. Government benefits and tariffs are used to protect local sugar producers. But they can distort the market, creating artificially high supply and depressing prices.
Weather. Wet weather can affect crops and reduce supply, driving up the cost.
Health concerns. Governments are under pressure to take action against high obesity rates, resulting in taxes or restrictions — ultimately leading to a decline in consumption and prices.
Ethanol demand. Sugar can be used to make ethanol, which competes with gasoline as a fuel source. A fall in oil prices can depress sugar demand for ethanol, while an increase in oil prices might mean higher demand for sugar-based ethanol.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Bottom line
You can invest in this sweet commodity through ETFs, stocks, futures and more. Each option comes with its own risks, not to mention unpredictable factors that affect most commodities — like weather and politics. Before you buy, compare your investing options for other commodities and trading platforms.
Frequently asked questions
ICE is an American company that owns exchanges for financial and commodity markets. It operates 23 regulated exchanges and marketplaces, including:
ICE futures exchanges in the US, Canada and Europe
Liffe futures exchanges in Europe
New York Stock Exchange equity options exchanges
OTC energy, credit and equity markets
It’s a futures contract like Sugar No. 11 that allows you to invest in the delivery of cane sugar through the American Intercontinental Exchange.
This price is constantly changing. Search for the current price through your online brokerage account or a broker before purchasing.
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
