"Sweet" profit for investors in the commodity market

Climatic factors have caused global sugar supply to shrink. The rise in energy prices due to geopolitical developments also has an impact on the direction of sugar prices.

With these developments, the pound price of sugar increased by more than 35 percent this year, reaching 0.2027 dollars, as concerns about supply increased in international markets. Sugar was $0.15 a pound on December 31.

Sugar prices hit the highest level since December 2024 at $0.2124 this week.

Futures and commodity markets expert Zafer Ergezen, in his evaluation to the AA correspondent, said, "One of the most important reasons for the rise in sugar prices is the rise in oil prices. The fact that oil prices remain high causes sugar producers to prefer producing ethanol instead of producing sugar. Because sugar cane can also be used to produce ethanol." he said.

Stating that when oil prices rise, naturally the price of ethanol also rises, Ergezen emphasized that manufacturers prefer to produce ethanol instead of sugar.

Ergezen said, "As ethanol production increases, sugar supply decreases. When sugar supply decreases, prices go up." he said.

El Nino weather event affects the rise in sugar prices

Stating that another factor causing the increase in sugar prices is the El Nino effect, Ergezen emphasized that this situation affects South America and Southeast Asia the most.

Stating that these regions are important regions for world sugar production, Ergezen noted that Brazil and India especially stand out in sugar production.

Ergezen stated that the decrease in monsoon precipitation in India and the El Niño effect in Brazil reduced sugar production expectations, increased supply concerns and increased the upward trend in prices.

The increase in insurance and freight expenses also affects the rise in sugar prices.

Zafer Ergezen said that the demand for sugar in India is quite high, therefore the restrictions on sugar exports in the country are among the factors affecting sugar pricing.

Ergezen added that the rise in oil prices and the increase in insurance, freight and fertilizer costs are other factors that cause the prices of agricultural products, including sugar, to rise.