Crude oil and sugar are highly volatile commodities. Crude oil continues to power the world despite decarbonization efforts. Meanwhile, sugar is a critical input in food and fuel. The trend towards clean energy has only increased sugar demand in Brazil, the leading South American economy and most populous country in the continent. The U.S. is the world’s leading corn producer and exporter, making corn the agricultural product of choice for ethanol production. Meanwhile, Brazil is the top sugarcane-producing and exporting country, making the sweet commodity the input in biofuel production. Rising oil prices tend to translate to higher sugar prices, and the nearby futures have risen to the highest price since March 2012 in April 2023.
In an early April 2023 Barchart article, I wrote, “Crude oil found a bottom.” In a late March 2023 Barchart article, I wrote, “Sugar has not exploded higher, but the soft commodity’s price action continues to sweeten on the upside in late March 2023.” Crude oil recovered in April, and sugar moved to a new multi-year high.
