The sugar sector is one of the best places to invest your money. Sugar has numerous domestic and industrial use making it a daily component of household cooking and manufacturing processes. Investors have more reasons to put their money in sugar stocks because the returns are forecast to be better because of the effects of frost in the world’s leading sugar-producing fields in Brazil. This environmental factor has forced prices of United States raw sugar and the United Kingdom white sugar to skyrocket. The high prices are also pegged on the poor harvests in India, Thailand, and Central America.
Sugar stocks are a lucrative investment since countries across the globe started reopening their economies after the Covid-19 pandemic forced them to close.
Here are the best sugar stocks according to market forecast.
Wilmar International Limited (SGX: F34)
Stock investment in Wilmar International Limited (SGX: F34) is a decision you will never regret. The entity is based in Singapore and has numerous subsidiaries that get quality management services from this parent company.
The entity is focused on food processing, where sugar milling and refining and oil seed crushing processes have been mastered. Your money is in safe hands because the company was on the 2022 Fortune Global 500 companies list. Additionally, Wilmar International Limited (SGX: F34) is among the top ten sugar-producing entities and recorded over $29 billion in revenue in Q2 of 2021.
The second option to buy sugar stocks is from an American renewable chemicals global producer and a food processing company. Archer-Daniels-Midland Company uses beet and sugar cane to produce invert sugar, granulated sugar, and liquid sucrose.
Archer-Daniels-Midland Company had admirable revenue growth in Q2 of 2021. The sweetener section of the entity contributed $2.8 billion to the gross revenue.
You can also opt for the American food and agribusiness company Bunge Limited. This entity is involved in the fertilizer business, grain trading, and food processing. The company has an agreement with BP p.l.c, a British oil and gas company, to manufacture sugar and low carbon ethanol. This trade agreement has seen Bunge Limited’s annual sugar cane crushing capacity increase to 32 million tons.
The bioenergy and sugar arm of the company is doing well. It contributed $68 million of the attractive gross revenue.
The Hershey Company
You need to try The Hershey Company, another American company on this list. The company has specialized in manufacturing sugar-based confections and chocolate food products. The Hershey Company sources its sugar beet supply locally, while sugar cane is mainly supplied from Mexico and Brazil despite having a small local supplier.
This entity has invested in sourcing all its sugar from renewable sources. There is solid growth in the confection section that largely depends on sugar.
Last on our list, but not least, is Ingredion Incorporated. This American ingredient manufacturer has an appealing growth forecast making it one of the best sugar stocks to purchase. It produces starch sugars and modified starches. Some of its bestselling products are high fructose and glucose syrups. The entity also is the source of the in-demand sweeteners.
The yield uncertainties in Brazil and an increase in Indian exports have necessitated active hedging of sugar futures. This hedging benefits those who have invested in stocks. Waves of frost and shortened rain seasons in Brazil have delayed harvests and reduced the yield. There are also chances of wildfires that will affect sugar plantations. The weather conditions will not improve anytime sooner. This natural phenomenon will continue to limit supply and increase sugar prices.
Europe will also have low production of sugar beets due to inadequate sunshine and excess rainfall. These conditions will affect the sugar content of Europe’s raw materials.