Raw sugar futures on Thursday closed 2009 at the highest level in almost 29 years, driven by a deep shortfall in sugar supply which triggered heavy fund investment in the sweetener, which in previous years of this decade had not boomed as much as other commodities.
The benchmark March raw sugar contract finished Thursday at 26.95 cents per lb, up 128.19 percent over the close of 2008, and its loftiest settlement based on the weekly spot daily charts since February 1981, according to Reuters Data. It was the strongest rally in sugar since 2006 when it reached as high as 19.73 cents and beyond that, one would have to go back to the early 1980s to see sugar rally past 20 cents.
Fuelling this year's sugar rally are poor monsoon rains in India which decimated the cane crop in the No 1 world consumer and excessive rain damage to sugar production in top producer/exporter Brazil. Sugar helped lead a surge this year in the soft commodities sector. Investment funds controlling large pools of capital poured cash into the sweetener, betting the rally could lift values to 30 cents in 2010.
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