Sugar prices may be gaining momentum after the strong El Nino weather phenomenon hurt plantings in India, Thailand and Brazil, the world’s top producer.
The ISO data is “helpful” and “reiterates that El Nino is not over; we still don’t have the final tallies on Thai and Indian crops,” Michael McDougall, a senior director at Societe Generale, told Bloomberg. “Pressure is increasing as we move forward, things are getting tight.”
Moreover, Brazilian producers are also converting more sugar into ethanol to meet rising demand for biofuel, especially after the steep depreciation in the Brazilian real has made U.S. dollar-denominated crude oil costlier for domestic users.
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Max Chen contributed to this article.