Sugar futures staged a dramatic recovery on Thursday, driven in part by concerns about the prospects for the sugarcane crop in the key Indian province of Uttar Pradesh.
The Swiss firm SGS SA told Bloomberg that total sugar output from India might come to 23.27 million metric tons in the 2010-2011 harvest year, lower than official forecasts of about 25 million. The 8.7 percent shortfall could be caused by heavy rainfall, infestations and crop diseases in Uttar Pradesh, the biggest sugar-growing region in India. According to the report, almost one-third of Uttar Pradesh sugarcane farmers reported damage from the rains.
"There is demand for Indian sugar from Pakistan, China and Russia, and Brazil’s production hasn’t changed," Abinash Verma, the director general of the Indian Sugar Mills Association, told the news service in a telephone interview. "There's no surplus in the international market."
On the IntercontinentalExchange, No. 11 sugar futures for March 2011 delivery surged 6.499 percent to 28.31 cents per pound, after earlier rising above 29.5 cents per pound.