Historically, sugar price charts show a distinct pattern in response to El Niño and La Niña. The former is often associated with droughts in India and Southeast Asia causing global production shortfalls and firmer prices. This occurred in the 2015-2016 season. La Niña patterns have the opposite effect.
Other factors (besides weather) can influence the market, as well. These range from global demand (by the food industry) to how much of the Brazilian cane crop is diverted (to the energy sector) for ethanol production.
That being said, the link below shows a previous article we posted about our longer term bearish view. Other than crude oil, cotton and precious metals (all of which have pushed steadily higher), sugar has typified a classic bear market over the past 14 months.
Looking forward, what happens with prices over the next 12 months will be highly dependent on the coming Indian monsoon and the Brazilian production.
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