Gimme Some Sugar: How to Invest in Sugar?

Published Thu, 16 Dec 2011 23:25 CET by

Sugar is, together with cotton and coffee, one of the oldest commodities traded on the IntercontinentalExchange (ICE). More than 23 million sugar futures have been traded in 2011. The most important sugar-producing countries are Brazil, India, China and Thailand. Brazil is the largest exporter of sugar.
World wide, demand for sugar is still rising, especially in developing countries where prosperity is increasing. The last two years, sugar production was lower than sugar consumption. The increase in consumption is also fueled by the increasing demand for biofuels, which are based on the byproduct of sugar refining, molasses.

S&P GSCI Sugar Index

S&P GSCI Sugar Index

How to invest in sugar?
For investors wanting to invest in sugar production or sugar refining, there are several options. First, there are some sugar ETFs traded in the US, like iPath Dow Jones-AIG Sugar Total Return Sub-Index ETN (SGG), iPath Pure Beta Sugar (SGAR) and Teucrium Sugar Fund (CANE). These ETFs don't have any dividends.
Second, there are some publicly traded sugar stocks in the US as well as in other countries. US traded sugar stocks are Imperial Sugar (Nasdaq: IPSU), Seaboard (AMEX: SEB) and the Brazilian Cosan (BM&F BOVESPA: CSAN3, CZLT11) (NYSE: CZZ). Foreign stocks are for example AGRANA (Vienna: AGR), Associated British Foods (LSE: ABF), Rogers Sugar (Toronto: RSI) and Südzucker (XETRA: SZU).
Third, you can invest your money in sugar futures, or speeders. Since these investments are relatively short-term and this website is about dividend investing, our focus will be on sugar stocks.

Imperial Sugar
Imperial Sugar is a major US sugar producer and marketer based in Sugar Land, Texas, with sugar refinery operations in California, Georgia and Louisiana.

Seaboard is a diversified conglomerate that operates worldwide a number of agriculture and ocean transport businesses. It has an interest in Tabacal Agroindustria, an Argentine company engaged in sugar cane production and refining.

Cosan has established itself as Brazil's largest player in the sugar and energy sector. Cosan is operating in every link in the ethanol production chain, from planting sugar cane to the distribution and retail sale of fuel.

Agrana is an internationally oriented Austrian company which supplies both industrial and end customers with sugar products under the Wiener Zucker brand. It is one of the largest suppliers of sugar and isoglucose in Central, Eastern and South-Eastern Europe.

Associated British Foods
Associated British Foods is a global food, ingredients and retail company headquartered in London, UK. Its ingredients division is the world's second largest producer of sugar.

Rogers Sugar
Rogers Sugar, formerly Rogers Sugar Income Fund, is the largest refined sugar distributor in Canada. Its sugar products are marketed under Lantic in Eastern Canada and under Rogers in Western Canada

Südzucker is a German company, the largest sugar producer in Europe with an annual production of around 4.8 million tonnes.

Sugar, world price chart

Disclosure: at the moment of writing, TopYields doesn't own any of the sugar stocks mentioned.