Sugar is putting on a quite prideful display in 2009; granted it is no AIG (AIG) in terms of doubling every week in value but for a commodity that actually is not government supported it is doing quite well.
Wait a second... sugar is also subsidized in the U.S..... is there anything the government is not protecting?
We mentioned sugar was at a 28 year high at the beginning of the month due to a weak monsoon season in India [Aug 7, 2009: India's Growth May Suffer Due to Weak Monsoon Season] and sugar is now making a case for commodity of the year [Jun 20, 2009: The 10 Hottest Commodities of 2009] Brazil has now joined the rain story in sugar... however, for completely opposite reasons as India.
- Sugar-cane output in Brazil is declining after rains this month in parts of the Center South, the worldâ€™s biggest producing region, were at their most severe in more than six decades.
- Precipitation in northern Sao Paulo state reached 150 millimeters (6 inches) this month through Aug. 26, the most since 1948, Biagi, the worldâ€™s second-biggest sugar-cane grower, said in an interview.
- The showers will pare the Center Southâ€™s cane output in the second half of this month to 30 million metric tons from 40.1 million in the first half, he said.
Speaking of Brazil and sugar.... (mid August story)
- Cosan SA Industria e Comercio, the worldâ€™s biggest sugar-cane processor, gained the most in eight weeks in Sao Paulo trading on speculation a drought in India will boost prices for the sweetener.
- Piracicaba, Brazil-based Cosan posted a record profit for its fiscal first-quarter on gains from hedges, a stronger real and higher prices for sugar, according to an Aug. 14 filing.
- Raw-sugar futures in New York have surged to the highest in 28 years amid output shortfalls in Brazil and India, the worldâ€™s two largest producers.