Sugar price expected to remain high
Australian sugar prices have recently reached levels not seen for 30 years, driven by high demand from India and poor harvest progress in Brazil.
According to a prediction in the latest NAB Rural Communities Wrap released today, the price of sugar will remain strong in the short term due to the tight supply/demand situation. Import demand is expected to lift mid 2010, and the medium term price outlook will depend of the 2010-11 crop conditions in both Australia and Brazil.
Khan Horne, NAB Agribusiness General Manager, said that the high sugar prices were great for local producers and still looking very strong for the coming Australian crop.
“The global supply situation for sugar is tight with uncertainty still around the size of the Brazilian and Indian crops, which means that prices are likely to remain high for at least the next six months,” Khan said.
“If these two countries harvest good crops, prices may come back, however if they are threatened then prices will probably remain at or above current levels in the long term.
“Australian sugar growers have had a few tough years with low prices.
“While the feeling is generally optimistic with some growers using their higher incomes this year to replace equipment, growers remain cautious about the possibility of a commodity price downturn.”