Sugar started to rise in price again. The market is concerned about a possibility for India to restrict the export of sugar because the harvest and processing do not reach the required volumes in the country. Importers immediately turned their heads to Australia, but Australian exporters, speculating for a rise, stated that they were unable to handle all orders.
"The prices started to grow after Brazil and India said that they would not be able to fully execute their obligations on the delivery of raw sugar. Extreme weather conditions observed this year caused serious damage to the harvests of sugar beet. That is why market members are discussing a possibility for India to introduce restrictions on the exports of its sugar. On November 11, prices skyrocketed to 33.39 per pound, which became the maximum point since 1981," Anna Bodrova, an analyst with Investcafe told Bigness.
Market members started showing interest in Australian sugar earlier than expected. In Australia, harvests depend on weather conditions connected with La Nina ocean-atmosphere phenomenon, which brought showers and high humidity to the regions, where the Australian cane is cultivated.
The futures on raw sugar hit the maximum level in 29 years because of the situation with harvests in India. The price of the March contract on raw sugar as of November 29, 2010 at the New York Commodity Exchange went 30 points up and reached the level of 28.25 cents per pound ($622 per ton). At London Exchange, the March contract gained $1,10 to $718,40 per ton.
Beginning from November of the current year, world prices on raw sugar reached the maximum in 29 years and neared 27.45 cents per pound. A week earlier, the price on the product neared 28.15 cents (+6.3 percent during a week) and continues to grow, because the forecasts for world shipments are still pessimistic.
The problems with harvests of sugar in India directly affect Australia. The world's third largest world exporter of sugar receives more and more orders for the product.
In the Russian Federation, the growth on sugar prices takes place as well. In October, sugar gained 13 percent to its price (16 percent since the beginning of the year). Moldavia, Ukraine and Belarus do not have any significant problems with harvests.