Sugar price sours amid Thai and Indian oversupply

Global sugar prices will come under pressure as returns from Thai and Indian harvests are showing a huge oversupply, according to Rabobank analysis.

The bank’s second-quarter report noted that US buyers had already cut their prices in anticipation of the excess global sugar supply. New York raw sugar futures have been under pressure in recent months, falling from 24.9c per lb in the first week of March to 19.8c per lb by the final week of May.

“This has been driven by a combination of factors,” said report authors Andy Duff and Rafael Barbosa. “The progress of key harvests in India and Thailand has added to the certainty of a substantial surplus in the current 2011/12 (October/September) international crop year, while preliminary projections suggest that another surplus is on the cards for 2012/2013.”