The supply of sugar from top global producer Brazil is prone to wane and the likelihood of a delivery of the sweetener from the Philippines is dropping, according to Bloomberg.
Brazil's sugar is of higher quality than that of the Philippines, but output from Brazil will fall for the first time in 10 years this season, industry advocacy group Unica stated. The advocacy group noted that shortages will stem from the Center South region, the primary location in Brazil where sugar is produced.
"Sugar has suddenly seen its structure firm up substantially as the concern over Philippine sugar delivery has faded somewhat," states a Monday report penned by senior vice president Michael McDougall with Newedge Group in New York. "The trade realizes that Brazilian sugar availability is much less than originally thought."
At 11:25 a.m. on Monday, sugar futures increased 2.32 percent, a 0.64 cent gain to 28.28 cents per pound.
Reuters reports the Sugar and Integrated Industries Company, an Egypt-owned outfit, cancelled the purchase of 50,000 tons of raw sugar because of high prices.
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