China Drought
China, the biggest consumer after India, may have a deficit of 3.3 million tons this year after drought and cold weather cut yields, the Guangxi Bulk Sugar Exchange Center said last month. Thailand, the second-biggest exporter, may produce 7.2 million tons in the year started in November, less than the forecast.
“There’s a real rationale to be invested in sugar, at least until March,” when the Brazilian harvest begins, Hussein Allidina, head of commodity research at Morgan Stanley, said in an interview in Dubai. Prices will extend gains as a deficit was expected to last through the season ending Sept. 30, he said.
Sugar output in Brazil, the top producer, may increase by as much as 4.4 million tons to 35.3 million tons in 2010-2011, as growers boost planting to take advantage of record prices, Plinio Nastari, president of research firm Datagro, said in an interview on Feb. 7 in Dubai. The global sugar market may have a surplus of 1.5 million tons next year, he said.
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