From The BBC:
The price of raw sugar has increased to its highest level since 1981, as supply concerns grow.Raw sugar futures added 3% on Monday, to finish the day at 22 cents a pound. “The main problem is a deficit in sugar supplies,” said Nick Penney, a trader with Sucden Financial, a firm that focuses on sugar trading. Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in Indian production, have both prompted worries, he explained. Sugar production in India for 2008-09 fell 45% year-on-year, according to a report by Sucden. And a “drastic fall” is expected for the coming Indian crop, it said. India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops. There are concerns that the pending sugar crop, which will be ready around November, will be inadequate. “This [sugar market] train is running express,” said Alex Oliveira, senior sugar analyst for Newedge USA in New York. “It’s feeding on itself.”…
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