Raw sugar futures were up almost 2% heading for 30 year highs once again to close at 32.64 cents per lb. The rise was after India announced that it had revised down its production outlook for 2010/11 from 26 million tonnes to 24 million tonnes. Weather conditions have decreased the expected percentage of sugar recovery. The announcement is also likely to delay and diminish the chances of a positive outcome under India’s Open General Licence for sugar exports, thereby adding to world supply concerns.
Sugar price volatility is expected to remain high until the prospects for sugar supply become clearer.