iPath DJ-AIG Sugar (AMEX:SGG)

CAPS Rating: 2 out of 5

Recs

1
Player Avatar ajacks1000 (< 20) Submitted: 1/6/2010 9:33:42 PM : Outperform Start Price: $81.00 SGG Score: -26.51

Bad weather tends to disrupt the supply of so-called "soft commodities" -- sugar, coffee, cocoa, and the like -- to an extreme degree. Sugar was up 165% last year, as India increased demand just as a storm damaged Brazil's output.

With the sugar deficit projected to be around 13.5 million tons this year (versus 15.8m in 2009), SGG seems like a safe bet for outperforming the market. Just don't expect any more miraculous price hikes.

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