Sugar is one of the most popular commodities in the world. Every day, it is consumed in its pure form or as a derivative by more than 6 billion people.
In the past decades, the number of people who consume sugar has been on the rise in line with the growing population. Asian and African countries have continued to see increased population and economic growth, which has led to more demand.
At the same time, improved technological advancements has led to better cane varieties that grow fast. It has also led to more acreage as companies work to fulfil the demand.
However, recently, in the developed countries, more people have started to get rid of sugar in their diet because of its health implications. Large companies that buy sugar like Coca-Cola have been forced to reduce the intake of sugar.
As a result of these factors, the price of sugar futures has been on a downward trend. After rising to $23.97 per tonne in 2016, the price has declined to the current price of $12.96. It reached a multi-year low price of $10.13 in 2015.
In recent weeks, the price of sugar has been in consolidation mode. Nonetheless, with the EMAs as shown below, and with the RSI at 36, there is a likelihood that it may test the low of $10.13 before it starts moving higher.