News
26.10.2010
Sugar prices hit 30-year high on supply crunch
No relief is visible in the near futures for global sugar prices amid supply crunch despite predicted bumper harvest in Brazil and India. Instead prices are soaring to near 30 year high.
Demand for the sweetener is increasing but the market is unable to move in line with the demand due to restricted supply. Apparently, the deficit should make the prices so hot that common would dire to touch, say experts.
Production is also failing to keep pace with pent-up demand as many importers delayed buying earlier in the year in the hope that prices would fall, instead relying on 'hand-to-mouth' purchases.
But severe weather problems in Russia, Pakistan and other countries has crushed hopes of an increase in world production this season and pushed prices back toward their peaks.
"Prices could rise above previous highs," Dow Jones Newswires quoted Peter de Klerk, an analyst at the U.K.'s second-oldest sugar trade house Czarnikow as said. "We initially projected to have a 2.5-million-ton surplus in 2010-11, but now if anything the market is heading into a deficit."
Raw sugar futures traded in New York approached a nine-month peak of 28.75 cents a pound on the March contract, while the white sugar contract in London surged to a eight-month high of $725.70 a metric ton last week.
Commodity Online
