Learn Sugar

Trading

With an astounding selection of over 250 instruments, AvaTrade gives you the option to start trading UK many commodities.

Sugar Trading Markets

Even though the sugar commodity is used around the world, its contract and price are determined in a few places. The sugar commodity is traded in the International Exchange (ICE), Kansai Commodities Exchange (KEX), Brazilian Mercantile and Futures Exchange (BF&M), National Commodities and Derivatives Exchange (NCDEX), National Commodity Exchange Limited (NCEL), Zhengzou Commodity Exchange (CZCE) And the Multi Commodity Exchange (MCX). There the sugar quotes are decided, and based on them traders perform their trades.

Unlike other instruments, sugar is not traded for days straight, but only from 8.30 until 17.59 GMT. The months in which its quotes are changed are March, may, July, October and December. Its exchange symbol is ICE US and on the MetaTrader 4 platform it can be found under the symbol SUGAR#11.

What Influences the Price of Sugar

Unlike other commodities which are only used by individuals and specific industries, sugar is consumed all over the world and by most of the population. This has a major impact on the price of sugar:

  • Supply and demand are, as usual, important to the process of determining the price of sugar. However, as mentioned, sugar is used by almost everyone so more people have access and effect the price.

  • As a derivative of the previous factor, many bodies fight the usage of sugar – as it is a cause of diabetes, obesity, teeth related issues and more. Countries want to narrow sugar induced health problems can change their policy regarding sugar, which can bring about a massive change in its demand rate.

  • A large portion of the sugar comes from Europe. As a matter of fact, Europe is the second largest sugar exporter in the world. Should import and export rates change, it could affect the supply numbers which could lead to a massive change in sugar price.

  • Today people are more and more aware to the dangers of sugar, and look for alternatives such as corn syrup and others. This could lead to an fluctuations of sugar prices and more people looking for a new sweetener for their food and drinks.

Sugar CFD Trading

In order to understand sugar trading better, an example is in order. Say the price is £23.38 for each lbs, and the minimal position size must be of one hundred units, bringing it to £2,338 total. However, as it is traded as a CFD

can be employed – £1 of the trader’s account for every £33 of the position’s value. That means the trader will need to invest £70.84 of his account. Should the sugar price go up – the trader can benefit, and if it goes down – his investment failed.

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Trading in leveraged currency contracts comes with substantial risk. You must be aware of these risks before opening an account to trade. High leverage amplifies gains as well as losses, leading to potential loss of the entire account balance. Trading in leveraged currency contracts may not be suitable for every investor. Never speculate using money that you cannot afford to lose.

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