The price of raw sugar soared on Thursday to its highest level since 1981 in a thin pre-Christmas rally by investors betting the sweetener could well power to new peaks early in 2010. The key March raw sugar contract jumped to a new contract high of 27.05 cents per lb, a rise of 0.55 cent to the loftiest for sugar in nearly 29 years, before investors sold off their positions in mild profit-taking.
The contract was trading 0.40 cent higher at 23.90 cents at 10:33 am EST (1533 GMT). "The funds keep pushing it up," said Alex Oliveira, senior sugar analyst for brokers Newedge USA in New York. Excessive rains which pounded Brazil's cane areas and a weak monsoon which prompted large sugar imports by the world's No 1 consumer India have been the catalysts behind the rally in sugar.
Another key factor is a yawning sugar deficit, which sugar merchant Czarnikow forecast in 2009/10 reaching 13.5 million tonnes, following a shortfall of 15.8 million tonnes in 2008/09. In London, the key March white sugar contract also hit a new lifetime and record peak at $695 per tonne, before ending up $9.60 at $694.
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