23rd Feb, 2006

However, the point to note here is that, there was a sharp collapse in the prices on both occasions. In 1975-76 there was a fall back to 12 cents/lb in 8 months after the top. Similarly, the rally of 1979-80 also busted and there was a fall back to 12 cents/lb in the next 11 months. That rally also ended where it had started. In fact there was a continuation of the slide and there was a fall to 3 cents/lb by 1985.

This time, Sugar prices crossed the 12 cents/lb level in Dec 05 and are currently trading near 18 cents/lb.

Remarkably, both cycles seems to have taken panned out exactly similarly in terms of the time taken for each rise and fall. This can be seen in the chart alongside, where we've superimposed the cycles on each other.

Even more remarkably, the current upmove seems to be following the time pattern of the earlier cycles to the T.

In the table below, we examine the percentage moves and time taken for each phase of the boom periods of all three cycles, namely 1972-76, 1978-82 and 2004-Current

That said, since 12.0 cents/lb was earlier a "breakout level" in the current big upmove, a correction down to that level now could provide a very good buying opportunity.

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