Robobank projected that there would be a global deficit of 7.2 million metric tons in the upcoming 2016/17 season after a 7.9 metric ton shortfall in the current season.
“The fundamentals that drove the rise in prices earlier this year have remained largely unchanged. Indeed, little has actually changed in the last quarter,” Robobank said, according to the Financial Times.
Robobank attributed to the deficit to smaller-than-expected harvest from major producers across the globe.
“Naturally, the factors that are arguably the biggest influences on the fundamental picture for global sugar—namely the size of the Indian, Thai and Centre/South Brazilian crops—are all still the subject of intense monitoring and debate,” Robobank’s global sugar strategist Andy Duff said. “But the uncertainties about each of them are all still months away from being resolved.”
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iPath Bloomberg Sugar Subindex Total Return ETN