This Year, Your Sweet Tooth Might Cost Less
On April 16th, many people worldwide will be celebrating Easter, a holiday that in the US tends to include heaps of candies. This year, the decreasing price of sugar might make those sweet treats cheaper, and just in time for American’s traditional candy shopping spree.
Don’t underestimate the importance of this holiday for candy producers. According to the National Retail Federation, in the United States nearly 90% of consumers celebrate the holiday by buying sweets. Americans are expected to spend around $2.6 billion on Easter candy, making Easter the 2nd biggest American holiday for candy, right after Halloween.
There are a few reasons for why sugar price is volatile, and here are just a few…
First of all, there are market expectations for a global supply surplus. India’s tax-free imports, announced last week, fell well below market expectations. Then there’s Brazil, where sugar crop has been far better – and bigger – than expected. There are estimations that sugar production in the Center-South region could reach a record. Last but not least, there is the leading Asian power: China, where some people estimate that the demand could decrease.
Will consumers enjoy the lowering prices? According to Bloomberg, in the four weeks ended March 26, the average price for chocolate and candy fell 7.7% from the prior period, indicating that this is a great time for Americans to stock up.
What’s next for sugar? It’s hard to tell, but a global surplus could motivate Brazilian cane millers to use more of the crop to make ethanol instead of sugar, which could potentially balance the price again. It’s also important to keep weather in mind. Like all other agricultural commodities, sugar can be easily and instantly affected by a change of weather – and some areas of Brazil’s sugar belt have been extremely dry, threatening cane growth. In India, thanks to El Nino, weather is also unusually dry, which could ultimately impact sugar plants.
At iFOREX, you can invest in many agricultural commodities in the form of CFDs including sugar, coffee, cocoa, corn and soy. Take a look at our full list of tradable commodities and take advantage of market volatility.