Commodities | Sugar may hit 28-year high on India imports

Commodities | Sugar may hit 28-year high on India imports
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First Published: Thu, May 07 2009. 11 14 PM IST
Updated: Thu, May 07 2009. 11 14 PM IST
Mumbai: Sugar prices may reach a 28-year high as a plunge in India’s harvest creates a global production deficit.
Raw sugar jumped 30% this year, in the biggest rally since 2005, and rose to 15.41 cents a pound on ICE Futures US in New York on Wednesday, the highest level since July 2006. Michael McDougall, a senior vice-president at Newedge USA Llc., said prices may gain another 30% in the last quarter of 2009 and the first quarter of next year to as much as 20 cents, the highest since 1981.
India, the largest consumer, will boost imports 33% to 4 million tonnes (mt) in the year through September 2010 as consumers buy more soft drinks and processed foods, according to Kingsman SA, a sugar broker and researcher.
The International Sugar Organization said yesterday the deficit will reach 7.8 million tonnes this year, the most in more than a decade and higher than a February forecast of 4.3 million tonnes.
The deficit is still ahead of us, said James Cassidy, the head sugar trader at Newedge in New York. We are not expecting anywhere near a sufficient recovery in Indian production, he added.
While Brazil, the largest grower, forecasts a 20% bigger harvest this year, Kingsman said sweetener output won’t be enough to meet world demand.
The gap may narrow to 4.9 million tonnes in the year that begins in October, according to a preliminary estimate, Sergey Gudoshnikov, an ISO senior economist, said in an interview in New York.
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First Published: Thu, May 07 2009. 11 14 PM IST