"Pour some sugar on me, Ooh, in the name of love. Pour some sugar on me, C'mon, fire me up. Pour your sugar on me, I can't get enough." - Def Leppard The rock band Def Leppard released its smash hit "Pour Some Sugar on Me" in 1987. But had the song come out today, the appropriate response would be, "Not at these prices!" In 1987, when the band was pleading with the "video vamp" to break the bottle and shake it up, sugar cost $0.10 per pound on the spot market. Sugar traded at the same price as recently as 2020. But today, it trades for more than $0.27 per pound - a 170% increase in three years. Due to poor weather, it is estimated that sugar demand will exceed production by 6 million to 7 million metric tons over the next three years, which will likely keep sugar prices elevated. That's going to affect companies like Tootsie Roll (NYSE: TR), whose flagship product lists sugar as its first ingredient. Kellogg (NYSE: K) also has strong exposure to sugar prices with sweet breakfast foods like Frosted Flakes, Froot Loops and Pop-Tarts. High sugar prices will affect Hershey Co. (NYSE: HSY), which is facing a double whammy due to rising cocoa prices as well. Cocoa is trading at its highest level in seven years, and prices are forecast to rise to nearly $3,400 per metric ton next year from the current price of $3,065. |
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Keep a civil tongue.