“We were expecting to produce more sugar from the cane than last year, but the drought affected both quality and quantity of sugar cane,” Somsak Jantararoungtong, secretary general at the Thailand’s Office of the Cane and Sugar Board, told The Wall Street Journal.
Additionally, India, the world’s second-largest sugar producer, could turn into a net importer for the 2016 to 2017 season after a wetter monsoon this year was unable to offset the previous two dry years., with production falling to less than 23.5 million metric tons.
According to the U.S. Department of Agriculture, global sugar stocks dipped to their lowest since 2011 at the end of May, Bloomberg reports.
Traders have piled into a bullish position on the soft commodity. Net-longs in sugar futures surged last month to the most since at least 2006.
For more information on the sugar market, visit our sugar category.
iPath Bloomberg Sugar Subindex Total Return ETN