Too much money chasing a return! Sugar is one of the most manipulated commodities on the globe and the stories that are in the press don't have anything to do with real demand! They are reported in order to draw new players into the market and then crush them when the market is collapsed by the market makers.
Thanks Tim for the article. Aivars Lode
Raw Sugar Advances to 29-Year High on Forecast Global Output to Decline
By Stephen Morris and Debarati Roy - Nov 4, 2010 2:39 PM ET
Raw-sugar prices jumped to a 29-year high on forecasts for lower global production after adverse weather damaged crops in Brazil, the world’s biggest producer.
Global output will be 167 million metric tons in the year that began this month, down from an estimate of 173 million tons, Paris-based Sucres et Denrees SA said yesterday. Production in Brazil’s Center South tumbled 30 percent in the first half of October from a year earlier, Unica, an industry association, said on Oct. 28.
“People are very concerned about the Brazilian crop, for this year and for next,” said Jonathan Kingsman, the managing director of Lausanne, Switzerland-based sugar broker Kingsman SA.
Raw sugar for March delivery rose 1.5 cents, or 5 percent, to settle at 31.66 cents a pound at 2:01 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 31.81 cents, the highest level for a most-active contract since Jan. 9, 1981.
The commodity gained for the seventh straight session, the longest rally since July 2009.
Global consumption this year will be 166.2 million tons, Sucden said. In the past three month, Brazil and Russia were the producers hurt most by adverse weather, the company said.
“The main problem is the lack of selling,” Kingsman said. “When people need to buy, there is no supply.”
India, the second-biggest producer and largest consumer, may export less than forecast, and shipments should be spread out to prevent global prices from slumping, a milling group said yesterday.
“India could also be a factor in sugar’s rise,” Kingsman said. “If they are going to control or limit exports, that might be worrying some people.”
Sugar has more than doubled since touching a 13-month low on May 7.
In London, refined-sugar futures for March delivery climbed $27.70, or 3.7 percent, to $776.50 a ton on NYSE Liffe. Earlier, the price reached $777.40, the highest level since at least 1989. The commodity has gained 9.3 percent this year.
To contact the reporters on this story: Stephen Morris in London at firstname.lastname@example.org; Debarati Roy in New York at email@example.com.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org