InvestIdeas

Sugar price reaches 28-year high

The price of raw sugar has increased to its highest level since March 1981, as supply concerns grow.

Raw sugar futures added 3% on Monday, to 21.55 cents a pound.

"The main problem is a deficit in sugar supplies," said Nick Penney, a trader with Sucden, a firm that focuses on sugar trading.

Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in Indian production, have both prompted worries, he explained.

Sugar production in India for 2008-09 fell 45% year-on-year, according to a report by Sucden.

And a "drastic fall" is expected for the coming Indian crop, it said.

India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops.

There are concerns that the pending sugar crop, which will be ready around November, will be inadequate.

that's it... now i shall only have kopi-o-kosong...

I still see packets of sugar on the table at the restaurants...

( In Hot Commodities, Jim Rogers did say that when you see people taking home packets of sugar from the restaurants, you will know that sugar is indeed at a euphoric stage )

Did my first trade on sugar today, shorting 1 contract of SBH10.

b0rderc0llie wrote:Did my first trade on sugar today, shorting 1 contract of SBH10.

You SUPER POWER, BC bro!!!

If you HUAT HUAT.. do remember to let us know

Hehe, dun think will be so fast... will have to suffer the uptrend and the bubble first, while waiting for the prices to normalise, if they do normalise in the future.

BC :

good luck... am lazy to check the details, as i have never traded sugar before..

what's the margin requirement and the delta ?

by the way, your SB10 is feb10 contract?

thanks..

SBH10 is Sugar March 2010.

Initial Margin is $2,352.00, maintenance margin $1,680.00

1 contract size is 112,000 lbs. $1 movement in sugar will mean a $1120 movement in each contract.

pretty heavy delta....all the best to you...

b0rderc0llie wrote:Did my first trade on sugar today, shorting 1 contract of SBH10.

hey hey... your short is looking mighty good.... the chart pattern seems to point to a further downside...

by the way, it does appear that our brokerages have set different initial margin requirements.. it seems mine requires less than usd2K per contract....