The price of sugar futures rose in New York trading today, with the price of raw sugar contracts for October delivery increasing slightly by .03 cents to 17.09 cents per pound. Earlier in the day the contract had traded as high as $17.23 cents per pound, a two-month record.
On the Liffe, an interesting situation arose – Bloomberg News reported that price of white sugar futures for August delivery were $86.70 per ton more expensive than the contract for October delivery, a state of affairs called “backwardation,” and it is a signal that supplies of sugar may be limited in the future.
Torential rains in Brazil, the world’s biggest exporter of sugar, have also raised the question of supply. The heavy weather has been particularly severe in the sugar-growing regions of Pernambuco and Alagoas, in the northeast.
Some analysts have suggested that the rain could destroy as much as 10 percent of the region’s crop, or about 6 million tons of sugarcane.
In Thailand, another of the world’s top 10 sugar producers, similarly fierce rainfall and subsequent flooding may destroy another 6 million tons of cane, the government said last month.
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