Queensland, where 90% of Australia’s sugar crop is grown is likely to face cyclone Yasi shortly. Queensland Cane Growers association announced that at least a couple of districts would be affected, falling in the expected path of cyclone Yasi. A threat exists to 25% of Australia’s sugar crop or over 8 million tonnes.
Sugar futures are down following rallies to near 30 year highs last week. However, supply is tight and provides support to prices despite raw sugar futures correcting by 4%. The cyclone and uncertainty over the size of Indian exports continue to ensure supply tightness.