KANSAS CITY — World and domestic raw sugar futures in New York shot to new 28½-year highs today on speculative buying and ongoing concern about tight global supplies.
Domestic raw sugar (sugar 16) prices on the Intercontinental Commodity Exchange traded to 27.5c a lb or above for all contracts through September 2010, which would be through the 2009-10 sugar marketing year. The nearby November contract pushed against the 28c mark, hitting a high of 27.99c, before falling back to 27.60 for the day. Futures prices were up more than 1c a lb for the week and easily soared past mid-August highs that were under 27c.
World raw sugar (sugar 11) futures on ICE traded up to 23.63c a lb before easing back to 23.45c. World futures also surpassed mid-month highs and were the highest since 1981. The domestic raw contract has been following world prices.
Global raw sugar supplies are tight because of a sharp drop in production in India, the world’s second largest sugar producer and largest user and because rains have delayed or reduced production in Brazil, the world’s largest producer.
Trade sources indicated some countries have begun to regulate or even confiscate sugar supplies and set how long companies may hold supplies to avoid hoarding.
Bulk refined sugar prices in the United States rose to 39c a lb earlier in the month and have held at that level, but a bullish tone persisted after the latest rise in raw sugar prices. Sellers in the United States still have sugar available.