Market Overview: Sugar (SB)

Refined sugar comes from two sources, sugar beets and sugarcane. Although the nature and location of production as well as the processing techniques for sugarcane and sugar beets are very different, the refined Sugar from each is indistinguishable.

Sugarcane is a bamboo-like grass that grows in tropical and semi tropical climates. Sugar beets are tubular plants, with a white, tapering root that grows to be about 12 inches long and weighs about 2 pounds. The bulk of the Sugar produced throughout the world, remaining after domestic consumption, is sold internationally under special protective agreements. Of the available supply after domestic consumption, roughly 20% is available to be sold on the free market. It is this “free market” Sugar which is referred to as World Sugar. The trade in World Sugar is monitored by the International Sugar Organization (ISO), a voluntary alliance of sugar importing and exporting nations. The number 11 denoted on the end refers to the grade that is accepted at par value for the contract. Less and more refined grades of Sugar are deliverable at discounts and premiums to the futures final settlement price.

Seasonal Overview:

Sugar prices tend to decline during the harvest times. The main harvest times for beet sugar are in the early fall, before the first freeze. Prices usually decline at this harvest time, from November through February, as supplies are processed and the refined Sugar hits the market. Planting scares, and the like, tend to boost prices in the first quarter of the year. As the beet crop is planted, cane supply is beginning to hit the market and prices tend to fall. Price weakness in late March through May, due to the cane harvest, is common. When the beet plant reaches maturity in July, prices normally decrease through August, since the market is assured of a new supply.

Like most other field crops (annually produced), Sugar tends to be the strongest when the crop is most at risk (planting) and weakest after pollination, going into harvest.


Sugar: (High: Mar or Dec//Low: Sep) Except for Brazil and Australia, major producers are in the Northern Hemisphere. Sugar beets are planted in early spring (Mar-Apr) and harvested in fall. Sugarcane produces for several years, but is harvested mostly fall through spring. Thus, September low reflects anticipated production.

Chart courtesy of Moore Research Center, Inc.