Sugar Shortage
Apr 28th, 2006 at 2:47 pm by Susie
And they thought we were addicted to oil? Wait until they cut off our sugar:
Commodities are the greatest show on earth right now and one resource that’s about to defy gravity is sugar. Sugar prices in the next 12 months could surge, even double as key producing countries like Brazil refine sugar based ethanol as fast as they can. Demand for ethanol as an alternative fuel is suddenly a “have to” not a “want to” for U.S. refiners. The U.S. is going to need much more ethanol this year as refiners are switching from using the water-polluting additive methyl tertiary butyl ether, MTBE, to ethanol to mix with gasoline.
When crude oil prices hit an all time record high of $75 per barrel in April sugar growers, like top producer Brazil ramped up their production of cane into ethanol to meet anticipated demand.
Raw sugar prices, which rose over 60 % last year, surged to a 25-year high of 19.73 cents per lb. in February.It seems likely to this trader that world prices to trade at between 17 and 22 cents on the New York Board of Trade over the next 12 months, despite hopes of improved cane harvests from Brazil and other major producers such as Thailand and India.
America has tariffs and quotas up the wazoo to protect the domestic sugar industry– much of which is in Florida and Louisiana, which have had weather problems lately…
Anyway, if we actually took a step for free trade, we could make most of the Caribbean and Central America very happy.