Raw sugar futures have been trading above $15.5 cents per pound since February 11th, 2020, a level not seen since May of 2017, amid a supply shortfall. Production in Thailand is expected to decline 28 percent to a nine-year low of 10.5 million tonnes in 2019-20 due to a drought. India also reduced its output amid unfavourable weather conditions and as production has been shifted from cane juice and B-molasses into ethanol. Brazil, the world’s largest sugar producer, have been affected by aging canes, drought and low sugar mix ratio. Also, farmers in Brazil have been switching its production from sugar to the biofuel.
Historically, Sugar reached an all time high of 65.20 in November of 1974.
Sugar is expected to trade at 14.83 Cents/LB by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 15.69 in 12 months time.