Sugar futures surged to a 30-year high on mounting concern that global supplies will trail demand following crop damage in Australia and India, two of the world’s leading producers.
Cyclone Yasi, which pounded the coast of Australia’s Queensland state, may cause the sugar industry losses starting at A$500 million ($504 million), a growers group said. Output from India may be less than predicted after heavy rains, a producer organization said. Prices have more than doubled since the end of June.
“The cyclone is the story,” said Jason Cole, a broker at Starsupply Renewables SA in Geneva. An extended rally will depend on the severity of the damage, he said.
Raw sugar for March delivery climbed 1.35 cents, or 4 percent, to settle at 35.31 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 36.08 cents, the highest for a most-active contract since November 1980.
In London, refined-sugar futures for March delivery rose $25.30, or 3.1 percent, to $844.50 a metric ton on NYSE Liffe. Earlier, the price reached $857, the highest since at least January 1989.
Yasi, the first category 5 cyclone to hit Queensland since 1918, has been downgraded to category 3, Australia’s Bureau of Meteorology said.
Prices of corn, wheat, soybeans, rice, livestock, coffee and cocoa have rallied this year, spurring governments to boost inventories as food inflation accelerates from China to Egypt. Adverse weather in the past 12 months slashed crops from Russia to Canada.