Sugar prices reach all time high on ethanol demand
Quicknote bioenergy commodities
Biofuels are really starting to influence commodity prices now that production of green energy is increasing rapidly and globally. Sugar prices climbed to match their all-time high on Thursday as record crude oil prices raised expectations for increased demand for alternative fuels like ethanol. Crude rose to an intraday record of $75.40 a barrel Wednesday after North Korea fired a volley of missile tests.
White sugar has climbed 77 percent in the past year, partly on speculation that higher oil prices will spur Brazil, the world's biggest sugar producer and exporter, to divert more of its harvest to making ethanol.
Farmers in the developing world, who were desperate because of low sugar prices that persisted for years, are beginning to feel the positive effects of the global shift to bioenergy.
"The ethanol link will really start to push prices higher. There is tightness in the domestic market in Brazil for ethanol demand." said Sudakshina Unnikrishnan, an analyst with Barclays Capital in London.
White, or refined, sugar for October delivery climbed as much as $8.40, or 1.7 percent, to $497 a metric ton in London, matching the record it set May 12, according to Liffe exchange data going back to 1989. It later edged back to $489.
Raw sugar futures for October delivery rose 0.14 cent to 17.16 cents a pound on the New York Board of Trade. They earlier rose to 17.25 cents, their highest level since May 15.
Sugar gained 4 percent in London on Wednesday, the most in two months, after India, the world's biggest consumer, banned most exports through March to curb rising domestic prices.
"While the supply and demand of the market is roughly balanced, the prospect of higher oil prices could increase the amount of sugar that is diverted into ethanol production," Sucden, a London-based commodities broker, said in a report.
International Herald Tribune.
Biofuels are really starting to influence commodity prices now that production of green energy is increasing rapidly and globally. Sugar prices climbed to match their all-time high on Thursday as record crude oil prices raised expectations for increased demand for alternative fuels like ethanol. Crude rose to an intraday record of $75.40 a barrel Wednesday after North Korea fired a volley of missile tests.
White sugar has climbed 77 percent in the past year, partly on speculation that higher oil prices will spur Brazil, the world's biggest sugar producer and exporter, to divert more of its harvest to making ethanol.
Farmers in the developing world, who were desperate because of low sugar prices that persisted for years, are beginning to feel the positive effects of the global shift to bioenergy.
"The ethanol link will really start to push prices higher. There is tightness in the domestic market in Brazil for ethanol demand." said Sudakshina Unnikrishnan, an analyst with Barclays Capital in London.
White, or refined, sugar for October delivery climbed as much as $8.40, or 1.7 percent, to $497 a metric ton in London, matching the record it set May 12, according to Liffe exchange data going back to 1989. It later edged back to $489.
Raw sugar futures for October delivery rose 0.14 cent to 17.16 cents a pound on the New York Board of Trade. They earlier rose to 17.25 cents, their highest level since May 15.
Sugar gained 4 percent in London on Wednesday, the most in two months, after India, the world's biggest consumer, banned most exports through March to curb rising domestic prices.
"While the supply and demand of the market is roughly balanced, the prospect of higher oil prices could increase the amount of sugar that is diverted into ethanol production," Sucden, a London-based commodities broker, said in a report.
International Herald Tribune.
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