Initial forecasts indicate that sugar supply roughly equals demand for 2011. This position can easily tip into a surplus or deficit. Unexpected weather and line up delays can exacerbate the impact on prices. In 2010 there was a line up of over 100 vessels during Brazil’s cane crush. With some vessels waiting more than a month to load at ports.
A rise in prices is expected during the first quarter of 2011 prior to Brazil’s harvest followed by a fall upon farmers planting more incentivised by rising prices.
The center south Brazilian May 2011 harvest is likely to be around 580 million. Should this be lowered by 20 million tones or should the US dollar fall significantly then there could be upward pressure on sugar prices.
Raw are not expected to break 35 cents per lb, possibly flirting with recent 30 year highs again and may then fall to a year’s low of 25 cents per lb during the year. Whites are expected to break above $800 per tonne also flirting with recent highs and falling during the year to a low in the region of $650.
Unless the weather or Brazil’s ports decide otherwise!