The price of sugar jumped to its highest level in eight months on Wednesday, but then retreated from that peak. The initial surge was driven by signs that Thailand may export 20 percent less sugar in the year that begins on December 1 than it did this year, reports Bloomberg News.
The Brazilian cane harvest is also projected to fall slightly short.
These shortfalls are significant to the sugar futures market because Brazil and Thailand are the world's largest and second-largest exporters of the sweetener, respectively.
"The market remains very tight, the Thai crop estimations are getting reduced," Jonathan Bouchet, a Geneva-based trader at OTCex Group, told Bloomberg in an e-mail today. "There is not enough sugar to sustain the demand out of Brazil. I believe the market could definitely hit 30 cents by December."
On the IntercontinentalExchange, raw No. 11 sugar futures for March 2011 delivery climbed as high as 27.9 cents per pound before slumping 0.69 percent to 27.26 cents per pound.
Liffe refined white sugar futures rose to nearly $710 per metric ton, but then dropped $6.70 to $691 per metric ton.
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