| When
futures prices are bid up by speculators there are usually
two important results.
1) A delay before end-user buyers increase their price.
Buyers also may decide to draw-down stocks, purchase
locally, buy substitutes, not purchase to store or forego
their purchases. (All of the above options are
modelled in the Sugarflows application.)
2) Producers sell more for the futures months being
bid up. The effect will be a flattening of premiums
and a decrease in general of physical sugar values versus
futures.
Sugarflows models the above producing dollar
values per ton as output, and allows for the quick solution
of comparative what-if scenarios.

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