Today I thought that we are going to look at the worst performing commodity of 2018. And, I was not surprised when I found out that the worst performing commodity of 2018 is sugar.
Why wasn’t I surprised? Well, let us take a closer look at all of the reasons for sugar to fail this year.
1. Demand level.
Demand for sugar has been lowering for years now. The world is trying to drop as much sweets as we can in order to drop those extra pounds from our hips. And rightfully so – sugar in one of the leading reasons for rapidly declining health of the people of the world. And as a result that massive NO to sugar results in a low demand for a commodity.
Will the demand grow in the nearest future? That is doubtful. The further we go, the more people are going to try and look for another sweetener. The one that is not so harmful. And the less users this commodity is going to see.
2. Weather.
Just like with any other soft commodities, weather and other natural cataclysms are of high influence here. And the worst the weather conditions are, the less supply is there. And we as traders know like no one ales – the worst is the supply, the less we want to deal with the asset.
Initially sugar went in the bearish stage and is having a hard time climbing out of it.
Frank Jenkins, the president of JSG Commodities in Connecticut says “All the bearish elements that had sugar pinned down initially are still in place, and some are even worse. We are looking for a long period of time with a very substantial surplus. We are in the fourth or fifth inning of this bear market.”
3.Traders do not believe on sugar.
The main problem for the commodity is the fact that traders have lost all of the faith in it. and in a way it is up to us to see that sugar recovers or now. If we are willing to risk we need to invest more in it. and if we are already ready to bury it, just forget about it.
All and all with a bit more than 3 weeks to go it is doubtful that we are going to see sugar’s price soar. After all the per-pound price of it costs $0.1287 at the moment which is 18 percent lower than a year ago.
Will we see bulls in the sugar market? We can only know that with the time.