Sugar prices down due to excess production

Agricultural , Commodities , Food May 29, 2012 No Comments

Sugar cubesSugar prices have dropped further this week, cancelling the increase from last week.
The main factors are the economic climate far from being the most euphoric, a stronger dollar and a very significant production surplus.

Wednesday, prices have dropped to 548.20 dollars per tonne in London and 19.36 cents per pound in New York, which corresponds to the lowest prices since August 2010.

According to the International Sugar Organization (ISO), sugar supply could exceed demand by 6.5 million tonnes for 2011-2012.

Indeed, whereas Brazilian production shows a significant decline, the deficit is largely offset by other major producing countries like India and Thailand.

Finally, on the London Liffe, a tonne of white sugar for August delivery was trading at 558 dollars on Friday down from 573 dollars a week earlier.

Meanwhile, on the NYBOT-ICE, a pound of raw sugar for July delivery was trading at 19.68 cents against 20.71 cents late last week.

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Pascal Blanc

Pascal has implemented numerous software solutions in the areas of procurement, sourcing, spend management, supplier evaluation and performance. His clients include Fortune 500 companies in Europe, Asia and North America. He is a co-founder of Source & Procure.

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