Bloomberg reports that sugar traded in New York surged to a 20-month high on Friday. Short supply has pushed prices higher after this year’s El Nino weather pattern parched fields from Thailand to India, the world’s No. 2 grower. While demand increases in Asia. most analysts are forecasting global deficits.
Analysts and traders have cited expectations for prices to continue to rally. The International Sugar Organization will probably have to increase its estimate for a supply shortfall in the 2015-16 season from a February projection. The group expects another deficit for the following season.
“The bullish story is for next year, and the market is anticipating that,” stated James Cassidy, global head of sugar derivatives at Societe Generale SA in New York.
Raw sugar for July delivery jumped 2 percent to 17.03 cents a pound at 11:43 a.m. on ICE Futures U.S. in New York, after reaching 17.29 cents, the highest for a most-active contract since Sept. 9, 2014. The commodity has climbed 12 percent this year.