Having a sweet tooth is going to start hurting your wallet.
Sugar traded in New York surged to a 20-month high on Friday. Supply woes are pushing prices higher after this year's El Nino weather pattern parched fields from Thailand to India, the world's No. 2 grower. At the same time, demand is increasing in Asia. Even with a bumper crop expected from Brazil, most analysts are forecasting global deficits.
At industry events in New York this week, analysts and traders 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, Jose Orive, executive director of the London-based group, said in an interview Wednesday. The group expects another deficit for the following season.
"The bullish story is for next year, and the market is anticipating that," James Cassidy, global head of sugar derivatives at Societe Generale in New York, said in a telephone interview.
Raw sugar for July delivery jumped 2.2 per cent to settle at 17.07 cents a pound at 1:03 p.m. on ICE Futures US in New York, after reaching 17.29 cents, the highest for a most-active contract since Sept. 9, 2014. The commodity has climbed 12 per cent this year.
