Cocoa, coffee, sugar and everything that is growing in Brazil has been surging on the higher side.
Sugar prices gained up by 13 percent for the month of August, and the prices are back at four-and-a-half-year highs trading above 20 cents a pound.
The support in sugar prices comes in from a decline in Brazil output which is expected anywhere between 7 percent and 10 percent and this is because of adverse weather.
Drought in Thailand also is one of the reasons why sugar prices gained. The bio-diesel demand across the world has been on the stronger side as well.
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The latest trigger though for the sugar, prices have been the International Sugar Organization report which says that the global sugar deficit for the year 2021-22 is estimated at 3.8 million tonne. Looking at the quarterly outlook from the International Sugar Organization, in sense of production, it says that the production will increase 0.2 percent to 170.6 million tonne, but the consumption is expected to increase much higher at 1.6 percent to 174.5 million tonne.
There also is a report from Fitch suggesting that the support to the crisis will come in from Indian exports which also are by the way on the higher side and the rising biofuel capacity that will continue to keep the markets volatile.
Watch the accompanying video of CNBC-TV18’s Manisha Gupta for more details.