- Trade options, futures, options on futures, stocks, ETFs
- $0 commission to close options
- Get $100-$5,000 when you open an account with $5,000 to $1,000,000+
How to invest in sugar
Sweeten your portfolio with this commodity through 4 strategies.
Harvested from two main sources — sugarcane and sugar beets — sugar is produced in more than 130 countries, with more than 70% of the sugar produced consumed in its country of origin. That’s one heck of a sweet tooth. And one heck of a way to diversity your portfolio. Just watch for sticky risks — investing in commodities isn’t for the faint of financial heart. Beginners can look to ETFs and other less risky avenues of entry into sugar.
1. Buy sugar ETFs.
Worth considering are exchange-traded funds — or ETFs. ETFs trade as shares on exchanges the same way that stocks do. But unlike stocks, they offer access to a variety of assets without needing to put all of your money into one or two companies.
ETFs allow investors to minimize risk by diversifying while also taking advantage of the performance and general popularity of a particular sector.
Popular ETFs that invest in Sugar No. 11, which is the benchmark in the raw sugar trade based on a futures contract for the physical delivery of raw cane sugar, include:
- iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG)
- Teucrium Sugar Fund (CANE)
- iPath Pure Beta Sugar ETN (SGAR)
Pros
- ETFs allow portfolio diversification and risk management.
- Lower costs than open-ended mutual funds.
Cons
- You relinquish some control over the split of assets.
- Earn up to 3% in matching funds on Robinhood IRA contributions
- Earn up to 5.25% interest on uninvested cash
- Get a free stock when you successfully sign up and link your bank account
- Trade fractional shares of stocks, ETFs and Bitcoin
- Invest with as little as $1
- Free to open, no minimum balance required and no commission fees
2. Buy stocks of sugar companies.
Another option for getting sticky with sugar is purchasing stock in a company that sells or is involved in the production of this commodity. A few to keep in mind are:
- Sugar producers
- Imperial Sugar Company (IPSU)
- Alexander & Baldwin (ALEX)
- Candy makers
- Hershey (HSY)
- Tootsie Roll Industries (TR)
Pros
- Choose from a range of stocks, and cash out when you want.
- Simple, accessible and versatile access to the market.
Cons
- On its own, puts all your eggs in one basket.
3. Buy sugar futures.
A common way to invest in physical sugar, futures contracts are legal agreements that allow you to buy or sell this commodity at a predetermined price at a specified time in the future. Contracts are negotiated at futures exchanges, which are like marketplaces between buyers and sellers, and you must trade on these contracts before they expire. Sugar producers and major sugar buyers often use futures contracts to lock in prices, but investors and speculators can also trade futures.
Various exchanges offer contracts on sugar, including the New York Mercantile Exchange — called NYMEX — which is part of the Chicago Mercantile Exchange, and the Intercontinental Exchange. You can get started through a brokerage account that allows futures trading — only a few of the major brokerage accounts enable you to trade futures, as well as some forex trading accounts.
Because futures contracts are standardized, one Sugar No. 11 contract always represents 112,000 pounds of raw centrifugal cane sugar.
Futures can be extremely volatile, making them a riskier investment than other options. Success comes down to hitting timing and price movement just right.
Pros
- Standardized contracts eliminate concerns about a commodity’s underlying quality and quantity.
- Investing is accessible through select brokerage accounts.
Cons
- Futures are volatile — you can’t predict exactly how prices will fluctuate.
- You must act on a futures contract before it expires. Otherwise, it’s worthless.
4. Buy sugar options on futures.
An options contract is an agreement between a buyer and seller that offers the option to buy or sell an asset at a later date and at an agreed price.
Because you can’t lose more than you paid for the option, excluding brokerage costs, one benefit is limited personal loss. So, if you’re wrong about the price of sugar, your loss is only what you paid for the option. Also, options are generally far less expensive than buying a futures contract outright.
The International Exchange — or ICE — offers an options contract on sugar futures. Check your futures brokerage’s options offerings to see if you can trade it.
Pros
- Less risky than sugar futures.
- Usually cheaper than futures.
Cons
- You must act on options agreement before it expires.
- If the option expires out of the money, it’s worthless.
Compare these providers for access to sugar ETFs and more
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
How much is sugar worth today?
What factors drive the price of sugar?
Investing in this volatile commodity comes with the possibility of substantial gains — and substantial losses. This is largely due to the number of factors that affect the price of sugar:
- Global supply and demand. If farmers expect high demand, they plant more crops, likewise planting fewer crops when demand is weak. If global demand exceeds or falls short of sugar supplies, prices are hit accordingly.
- Fluctuations in the Brazilian real. A weak real means greater supply on global markets and lower prices. That’s because when the real is weak, Brazilian farmers produce more sugar for export to countries with strong currencies and greater purchasing power. When the real is strong, they’re likely to sell in the local market.
- Government subsidies. Government benefits and tariffs are used to protect local sugar producers. But they can distort the market, creating artificially high supply and depressing prices.
- Weather. Wet weather can affect crops and reduce supply, driving up the cost.
- Health concerns. Governments are under pressure to take action against high obesity rates, resulting in taxes or restrictions — ultimately leading to a decline in consumption and prices.
- Ethanol demand. Sugar can be used to make ethanol, which competes with gasoline as a fuel source. A fall in oil prices can depress sugar demand for ethanol, while an increase in oil prices might mean higher demand for sugar-based ethanol.
Bottom line
You can invest in this sweet commodity through ETFs, stocks, futures and more. Each option comes with its own risks, not to mention unpredictable factors that affect most commodities — like weather and politics. Before you buy, compare your investing options for other commodities and trading platforms.
Frequently asked questions
More guides on Finder
-
Did you know a 7-year-old law might mean you’ll pay more in taxes in 2026?
5 tips to cut taxes even if the Tax Cuts and Jobs Act expires.
-
4 no-brainer money moves beginner investors should consider in 2024
If you’re new to investing you need to read this.
-
7 things every successful investor should know
Smart investments moves you need to know about.
-
Here’s what you need to know about the spot bitcoin ETFs
The spot bitcoin ETFs have been approved. What does this mean for bitcoin’s price, and should you buy in?
-
Are you prepared to invest if the market crashes?
How can you get your finances squared away in the event of a market crash?
-
Should You Raid Your 401(k)? Know the Pros and Cons
Learn all about what you should, and shouldn’t do, with your 401(k) retirement plan.
-
8 alternative investment platforms to try
We bring you eight alternative investing platforms worth trying to diversify your portfolio.
-
How to invest in cotton
Interested in investing in cotton? Here’s our guide to the investment options at your disposal, the benefits of investing in cotton, as well as the possible risks.
-
Investing in cocoa: A how-to guide
For those interested in investing in cocoa, here’s a guide to the different investment options at your disposal, the benefits of investing in cocoa and the possible risks.
-
The Warren Buffett Series
The life story of one of the most successful investors in the world.
Ask an Expert