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Sweet Stock Market Deals

1 August 2006 - Features - Editor

Commodities should form an integral part of every stock market portfolio. Demand for them is relatively stable, because of which they provide steady returns over time. Most of them go through cycles of supply-demand balances, so it helps if one can invest in them during an opportune period. However, most of them will not let down patient investors and those on the stock market for the long term.

The range of commodities available for stock market investments is large, but it is sugar which has the most stable and varied demand as the 21st century unfolds. Most investors are more aware of the sweet effects of the commodity than the other uses to which sugar cane plants can be put. The demand for molasses is certain to grow in tandem with that for sugar, as more people take to alcohol, and as the search for natural animal feed strengthens. It is the same with bagasse, which has many uses as a source of energy and to produce paper as well.

It is ethanol which makes all entities involved in sugar production, as exciting stock market prospects. There have been questions about air emissions of ethanol use, but the looming fossil fuel crisis has kept ethanol prospects alive. It is difficult to vision a future without copious ethanol use, and the implications for sugar as a valuable commodity are clear.

Brazil is a world beater when it comes to ethanol production and use, with more than a decade of commercial production under their belts. All companies with roles and technologies related to the production of sugar cane, its processing and extraction have excellent prospects both in the United States, as well as in the rest of the world. Though we started out in this article discussing sugar as a commodity, it is now apparent that the stock market potential of the plant from which it is produced, extends well beyond the refined white powder.

Tags:

commodities, portfolio, sugar, brazil

 



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