The devastating fires and drought currently blighting Russian crops have had the sharpest impact on grain markets, but sugar is feeling the effects too. Bloomberg/BusinessWeek reported that sugar futures climbed on Tuesday in response to a decrease in the forecast for the Russian sugar beet harvest.
Russian sugar beet production could fall as much as 20 percent, according to the Sugar Producers’ Union. Next year could see the nation importing 1.8 million metric tons of raw sugar.
On the Intercontinental Exchange, raw No. 11 sugar contracts for October delivery shot up over 4 percent to trade at 18.49 cents per pound. March 2011 prices were up 3.2 percent to 18.21 cents per pound; the higher short-term price could indicate a shortage in the currently available supply.
That could be due in part to the continually lengthening queues outside Brazilian sugar ports. This week, the queue at Santos, the largest sugar port in the nation, climbed from 67 to 75 waiting ships, reports Bloomberg/BusinessWeek.
With nearly 80 percent of the exports of the world’s largest producer of the sweetener going through Santos, those delays are certainly having an effect on the global price.
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