Sugar Rush in the Market

There is strong demand for sugar in the market in the latest trading session.

As stated by Abares, the strong demand for the sweetener will support the sugar prices which lift its forecasted future values, even amidst the rumors of it having harmful effects in health when too much is consumed.

Sugar futures were recently raised by Abares, which is the official Australian commodities Bureau by 1 cent to 21 cent per pound hitting the forecasted price range that was measured by New York’s spot futures contract, in 2016-17 on an October-to-September basis.

Abares stated that the forecast shows an "expectation that world sugar consumption will grow faster than production, reducing world stocks and the stocks-to-use ratio", which is a key pricing metric.

This projection was based highly on an anticipated increase in area where sugar canes are planted which leads to the production growth in Brazil, China, India, the European Union, Thailand and all smaller major producing countries.

On the other hand, consumption is also expected to rise by an average of 2.3% per year that is thanks to the deprivation of sugar and people finding alternatives like high fructose corn syrup.

However, it acknowledged that a "decline in consumption is projected in developed markets, particularly in the EU and the US", thanks to slowdowns in population growth, and "dietary changes based on increased health consciousness".

Finally the 1.2m-tonne delivery of sugar last week raised concerns over the demand, in potentially  indicating less demand in Brazil than had been thought.