Sugar exchange traded products surged Thursday after heavy rains disrupted harvests in Brazil, the world’s biggest exporter, and a drought damaged crops in Thailand.
On Thursday, the iPath Bloomberg Sugar Subindex Total Return ETN (NYSEArca: SGG) rose 5.0% and Teucrium Sugar Fund (NYSEArca: CANE) gained 2.4%. Sugar has sweetened in 2016, with SGG up 14.2% and CANE 14.9% higher year-to-date.
Related: Sweet or Sour for Sugar ETFs?
Meanwhile, sugar futures increased 3.9% to $0.1808 per pound Thursday.
Sugar prices advanced to a two year high Thursday as ongoing rains in Brazil slowed harvests. The heavy rains have already hurt cane crushing in Brazil.
“Rain continues to fall in Sao Paulo and is expected to continue on until early next week. That is causing a slowdown in port loading that began last month,” Michael McDougall, director of commodities for Societe Generale, told Reuters.[related_stories]
Meanwhile, heat and drought due to the worst El Nino weather in six decades have decimated Thailand’s sugar production, which officials now expect to be reduced by 14% compared to last season, the Wall Street Journal reports.