News

January 25, 2010

Soaring Prices Sweeten Sugar Markets

By Sally White

Soaring sugar prices are brightening prospects for Europe’s sugar businesses and attracting Chinese corporate buyers. Germany’s Sudzucker announced a 68 per cent rise in operating profits as sugar prices traded at 29 year highs and 150 per cent above a year ago. In Australia Shanghai’s largest food company Bright Foods made an offer for CSR’s sugar unit. Sugar prices rose 4.7 per cent on the week as the international supply crisis worsened. Indonesia, one of the world’s leading importers, drew a complete blank in its latest tender. In London white sugar went to US$760 a tonne and ICE March raw sugar moved up to US 28.95 cents a pound. Since January last year prices have risen steadily as shortages are emerging in an increasing number of Asian countries following bad weather in major producers Brazil and India. The latter has switched from being a major exporter to an importer.

In some importing countries, said consultancy Kingsman, domestic prices for white sugar have risen to US$1,000 a tonne. The European Union is considering whether it can legally export more sugar under World Trade Organisation rules – current Europe’s sugar exports are capped at 1.37 million tonnes after an agreement with Brazil. However, there is a good chance that Brazil will not agree to any relaxation. Forecasts that sugar’s price could rise to US 30-31 cents a pound came from brokers...