Even though the sugar commodity is used around the world, its contract and price are determined in a few places. The sugar commodity is traded in the International Exchange (ICE), Kansai Commodities Exchange (KEX), Brazilian Mercantile and Futures Exchange (BF&M), National Commodities and Derivatives Exchange (NCDEX), National Commodity Exchange Limited (NCEL), Zhengzou Commodity Exchange (CZCE) And the Multi Commodity Exchange (MCX). There the sugar quotes are decided, and based on them traders perform their trades.Unlike other instruments, sugar is not traded for days straight, but only from 8.30 until 17.59 GMT. The months in which its quotes are changed are March, may, July, October and December. Its exchange symbol is ICE US and on the MT4 platform it can be found under the symbol SUGAR#11.
What Influences the Price of Sugar
Unlike other commodities which are only used by individuals and specific industries, sugar is consumed all over the world and by most of the population. This has a major impact on the price of sugar:
- Supply and demand are, as usual, important to the process of determining the price of sugar. However, as mentioned, sugar is used by almost everyone so more people have access and effect the price.
- As a derivative of the previous factor, many bodies fight the usage of sugar – as it is a cause of diabetes, obesity, teeth related issues and more. Countries want to narrow sugar induced health problems can change their policy regarding sugar, which can bring about a massive change in its demand rate.
- A large portion of the sugar comes from Europe. As a matter of fact, Europe is the second largest sugar exporter in the world. Should import and export rates change, it could affect the supply numbers which could lead to a massive change in sugar price.
- Today people are more and more aware to the dangers of sugar, and look for alternatives such as corn syrup and others. This could lead to an fluctuations of sugar prices and more people looking for a new sweetener for their food and drinks.
The best strategy to use when trading sugar is going to depend on whether the market is trending, or if it is range-bound. In a trending market the various oscillators are often best at locating potential zones where pullbacks could occur, and areas where a trend could either continue or reverse. When the market is range-bound it is usually best to locate the areas of support and resistance and trade based off of moves from those levels. That type of strategy can also reveal the beginning of a new trend when price breaks through support or resistance rather than bouncing.
