Sugar may approach 30 cents amid tight supplies
Monday, 14 December 2009
MELBOURNE, Dec 13 (Bloomberg): Global supplies of sugar, the top performing commodity in the past six months, will remain "tight" for the first half of 2010, increasing the risk of further price spikes, JPMorgan Chase & Co said.
There is still a "material risk" prices for March and May 2010 futures contracts may approach 30 cents a pound, JPMorgan's global commodity strategist Tobin Gorey wrote in a report dated December 10. Sugar for March delivery in New York jumped 5 per cent yesterday to 23.26 cents a pound.
Sugar prices have almost doubled this year as adverse weather hindered harvests in Brazil and India, the world's top two producers. It reached a 28-year high of 25.43 cents on September 30 as global demand exceeded production for a second year.
"Getting the sugar market back into balance will take a couple of years," London-based Gorey said. The second-half of 2010 should see the beginning of a two-year rebuild of sugar inventories and an eventual return to prices ranging from 14 to 15 cents a pound, he said.
Raw-sugar futures for March delivery rose 1.11 to 23.26 cents a pound on the ICE Futures US exchange in New York Friday. It was the biggest gain for a most active contract since October 15.
Sugar is the best performer in the S&P GSCI Commodity Index the past six months, gaining 32 per cent in that time.
There is still a "material risk" prices for March and May 2010 futures contracts may approach 30 cents a pound, JPMorgan's global commodity strategist Tobin Gorey wrote in a report dated December 10. Sugar for March delivery in New York jumped 5 per cent yesterday to 23.26 cents a pound.
Sugar prices have almost doubled this year as adverse weather hindered harvests in Brazil and India, the world's top two producers. It reached a 28-year high of 25.43 cents on September 30 as global demand exceeded production for a second year.
"Getting the sugar market back into balance will take a couple of years," London-based Gorey said. The second-half of 2010 should see the beginning of a two-year rebuild of sugar inventories and an eventual return to prices ranging from 14 to 15 cents a pound, he said.
Raw-sugar futures for March delivery rose 1.11 to 23.26 cents a pound on the ICE Futures US exchange in New York Friday. It was the biggest gain for a most active contract since October 15.
Sugar is the best performer in the S&P GSCI Commodity Index the past six months, gaining 32 per cent in that time.