Sugar prices have topped the 16 cents a pound milestone on the New York Board of Trade, for the second time in a week.
It is all due to what is a worldwide shortage of sugar and analysts are confident the price rise could continue.
Greenpool Commodities analyst Tom McNeill said there were a number of international factors which drove the futures market upwards.
He said three countries, in particular, were influencing trade.
“Thailand will have lower expected production [and] India’s withdrawn from the export market,” Mr McNeill said.
“The Chinese crop is down [and] the physical market’s showing much stronger valuations that will ripple through into Australian sugar.”
He said traders had also pushed the price higher.
“In Thailand last week there was a quota tender for July to September and the buyers paid 1.3 cents per pound over and above the futures valuations,” Mr McNeill said.
“[Those are] very strong valuations given the weak state of the market over the last while [which has] seen values much, much lower than that.”
Mr McNeil’s outlook was reinforced by Queensland Sugar Limited treasurer Stephen Stone.
He said the current prices were good news for Queensland growers, with a jump in prices of almost 30 per cent.
“It is huge in gross terms and that is good news because we have had five years of depressed prices,” Mr Stone said.
“Sugar is such a heavily regulated market globally [and] it reacts very slowly to price movements and it takes a significant production change to turn markets around, and that is what has happened.”
Mr Stone said any further price rises hinged on how Brazil’s crushing season panned out.
Source – ABC