NYBOT’s President and CEO C. Harry Falk said: “The record volume and open interest levels in our World Sugar contract are an impressive reminder of how critical this market has become in the global commodities arena. As more sugar is made into ethanol to fuel cars, our sugar market will continue to provide this industry with the crucial hedging tools it needs to grow and evolve, while creating new opportunities for investors.”
Sugar’s remarkable growth can be partly attributed to its expanding role as an energy-related commodity. According to F.O. Licht, a noted sugar industry group, sugar was responsible last year for an estimated 50 percent of ethanol production – a major renewable energy source.
Brazil and the U.S. are the largest producers and consumers of ethanol. Brazil has had a long association with ethanol and has developed technology for flexible fuel vehicles (FFVs). Brazil is also the largest producer of sugar in the world. In the U.S., ethanol is blended with gasoline in amounts ranging from 5 to 85 percent, as a gasoline extender. The U.S. Energy Bill passed last year established a Renewable Fuels Standard that mandates the nation increase its usage of ethanol by 700 million gallons per year until 2012.
The frantic day in sugar follows on the heels of a year (2005) that saw Sugar No. 11 futures soar 62.4%, after a 59.44% advance in 2004. World Sugar at NYBOT accounts for over 40 percent of the total NYBOT volume. Sugar is produced in over 120 countries and consumed by every country in the world. NYBOT’s World Sugar contract trades from 9:00 am to 12:00 pm (NY Time), and has four delivery months including March, May, July and October. The sugar contract calls for 112,000 lbs. of raw centrifugal cane sugar from 29 countries throughout the world.
The New York Board of Trade (NYBOT) is New York’s original futures exchange, where the world trades food, fiber and financial products. For well over a century, the New York Board of Trade has provided reliability, integrity and security in a global marketplace for cocoa, coffee, cotton, ethanol, orange juice, wood pulp and sugar, as well as currency and index futures and options. Information about the New York Board of Trade can be found at www.nybot.com and www.nybotlive.com. To learn more about New York Board of Trade Futures & Options for Kids, the Exchange’s non-profit group, please go to www.futuresandoptionsforkids.org.
