Brazil, India sugar shortages causing spike in price of Sugar #11

The price of Sugar #11 is spiking.  Sugar #11 is just the fancy name for raw unprocessed sugar cane, which is made into the white stuff we sprinkle on cereal.  The countries to blame are Brazil, which has had a very wet few months which will decrease the likelihood of a bumper crop. 

Also, India is a major consumer and producer.  If prices spike, then political pressure for them to do export quotas will probably rule the day.  Those two things are causing a sugar spike. 

Oh by the way, sugar prices on the white refined stuff are probably twice as high as they need to be due to import tariffs.  So theoretically, anything with sugar, cookies, jam, yoghurt, etc. is more expensive too.  I bet you wonder why we use so much high-fructose corn syrup here, because sugar is so expensive. 

So if you can complain about the high cost of sugar, complain to congress first.  Via BW:

“People are very concerned about the Brazilian crop, for this year and for next,” said Jonathan Kingsman, the managing director of Lausanne, Switzerland-based sugar broker Kingsman SA.

Raw sugar for March delivery rose 1.4 cents, or 4.6 percent, to 31.55 cents a pound at 11 a.m. on ICE Futures U.S. in New York. Earlier, the price reached 31.68 cents, the highest level for a most-active contract since Jan. 9, 1981.

Global consumption in the year that started Nov. 1 will be 166.2 million tons, Sucden said. In the past three month, Brazil and Russia were the producers hurt most by adverse weather.

“The main problem is the lack of selling,” Kingsman said. “When people need to buy, there is no supply.”

India, the second-biggest producer and largest consumer, may export less than forecast, and shipments should be spread out to prevent global prices from slumping, a miller group said yesterday.

“India could also be a factor in sugar’s rise,” Kingsman said. “If they are going to control or limit exports, that might be worrying some people.

SGG (Sugar ETF) price history.  Price today is 93.00
More

WSJ: Brazil and India to blame for Sugar #11 spike
Benzinga: Sugar tariffs cost Americans 2.5 BB in 2009

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