Market Leader informed
Previously Masterforex-V Academy experts repeatedly suggested paying attention to the fact that sugar and coffee prices had been constantly increasing and updating their highs around the world. The recent publications of the Financial Times prove that in 2011 the situation is unlikely to change for the better. Moreover, the supplies of sugar and coffee will be restrained, which in its turn will create favorable conditions for the prices to continue their way up. Indeed, it sounds like a rather probable scenario if to take into account that last week Portugal completely exhausted its sugar reserves.
In terms of figures, the terrible situation looks as follows: On Monday at NYMEX the March raw-sugar contract broke a 30-year price record by reaching $0.335 per pound (453g). On the same day the March coffee contract (Arabica) reached $2.2695 per pound, which appeared to be a new price record in 30.5 years.
The Financial Times reports that the restrained sugar supply at the global market is caused by the unfavorable weather conditions in Brazil, the world’s main sugar-production region. India, the world’s second biggest sugar producer, was forced to restrain the export of sugar. The EU followed the example of India and restrained the sugar export as well.
As for Portugal, which ran out of sugar, the situation looks nonsense as no European country has seen anything like that over the last 30 years.
There are difficulties with the Columbian coffee supplies (it is notable for its premium quality) because of the heavy rains causing pour crop yield. This year Columbia has gathered the poorest crop of coffee over the last 35 years, just 486.000 tons.
By spring 2011 the prices on Arabica may reach $4 per pound. By the end of this year the prices are expected to reach $3 per pound.
Analysts for the Department of Market Sentiment Analysis, Masterforex-V Academy, assume that in 2011 the sugar supplies around the world will be restrained, which provides favorable conditions for further price growth.
In Feb 2011 they expect the prices on raw sugar to reach $0.39 per pound.
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Text: Pavel Gospodynich, Arthur Petrushevskiy
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