Sugar prices have risen to new highs, but consumers’ consumption should not prevent them from curbing their Halloween spending.
From an investment point of view, it’s advantageous to be exposed to rising sugar prices amid inflationary pressures.
On October 26’s Asian afternoon session, US sugar futures for March delivery rose by 0.47% to $27.66 per pound. In contrast, London’s sugar futures for the December contract steadied at $747.30 per metric ton.
Bureau of Labor Statistics (BLS) latest Consumer Price Index (CPI) report, glucose prices increased by 7.70% in September compared to last year. Concurrently, candy and chewing gum climbed by 7.50%, while other sweet products soared by nearly 3.00% from the previous year.
Furthermore, sugar and sweets surged by 6.50% yearly and 0.30% monthly, surpassing 0.20%, with a 3.70% annual rise in food inflation.
However, the National Retail Federation (NRF) stated that they do not see any decline in consuming candy this year. NRF expects consumers to spend a record high of $3.6 billion this year, reflecting a 14.00% increase from last year.
Conversely, increased demand and reduced supply generate significant optimism for sugar prices. While India, the leading global sugar producer, faces severe weather conditions that may further constrain production.
ETF for Sugar Spikes
Teucrium Sugar exchange-traded fund (ETF), the first sugar ETF in the market, drives exposure to record-high sugar prices, broadening investment opportunities.
This ETF is accessible for investors seeking a convenient means to access sugar for inflation protection or portfolio diversification.
Crucial amid uncertain Federal Reserve’s (Fed) policy, Teucrium Sugar ETF is an essential inflation hedge in today’s macroeconomic environment. The markets anticipate the Fed’s rate cuts when inflation reaches the target, but the duration of inflation’s persistence remains uncertain.
A Financial Stability report by the Fed noted that interest rates mirror the unexpected persistence of inflation. Furthermore, rapid rate hikes may trigger market turbulence, liquidity stress, and asset price adjustments.
