Rainfall in Brazil leads to soaring raw sugar price

The raw sugar price in Brazil climbed by more than 3% to 11.43 US cents per pound yesterday. The price rise was sparked by heavy rainfall in the Brazilian sugar cane growing areas, which could possibly delay harvesting. The production figures published by the industry association UNICA yesterday could also have lent buoyancy to the price, as they showed that sugar production in the main Center-South growing region totalled 2.84 million tons in the second half of August, which is in the lower range of what market participants had expected. 

This was due to an increase in ethanol production. Sugar trading company Kingsman was still confident recently that sugar cane processing in Center-South could have reached 48.9 million tons in the second half of August, which is 1.5 million tons more than UNICA's figure for the first half of August, notes Commerzbank.