Some investors are going all in on sugar.
Commodities might be in a deep rout, but raw-sugar futures prices have rallied to the market’s largest gain in four years, according to The Wall Street Journal.
The sugar market has until recently been mired in a years-long price decline, but it’s rebounding thanks to global consumption outpacing production. Now, the International Sugar Organization expects the year to result in a “statistical deficit.” Plus, it helps that the currencies in India and Brazil, some of sugar’s biggest producers, have seen modest improvement. Previously, in early 2015, a declining Brazilian real drove sugar prices down by prompting producers to up activity, according to The Journal.
But despite the optimism, some investors caution that the pile-on went too far, and that futures pricing is now removed for true transactional pricing.