Sugar may reach 30 cents in six months
Thursday, 7 January 2010
SINGAPORE, Jan 6 (Bloomberg): Sugar futures may rise to more than 30 cents a pound "within the next six to 12 months," said Sunny Verghese, chief executive of Olam International Limited, a food ingredients supplier.
A smaller Indian crop and demand for ethanol in Brazil may push up prices, he said in a Bloomberg Television interview.
Sugar futures in New York more than doubled last year as adverse weather damaged crops in Brazil and India, the largest producers. India is buying sugar for a second year after the weakest monsoon since 1972 worsened a supply deficit.
"With this sort of prices, there will be a lot of shift of acreage to sugar but the cycle that is required to recover supply-induced response is about 18 months," he said. "In the interim, stocks will turn down. Most of it is in the price but we think there's potential to breach 30 cents."
A smaller Indian crop and demand for ethanol in Brazil may push up prices, he said in a Bloomberg Television interview.
Sugar futures in New York more than doubled last year as adverse weather damaged crops in Brazil and India, the largest producers. India is buying sugar for a second year after the weakest monsoon since 1972 worsened a supply deficit.
"With this sort of prices, there will be a lot of shift of acreage to sugar but the cycle that is required to recover supply-induced response is about 18 months," he said. "In the interim, stocks will turn down. Most of it is in the price but we think there's potential to breach 30 cents."