Sugar Rises in N.Y., Gaining 12% This Week, on Short Supplies

Bloomberg) -- Sugar futures rose, jumping 12 percent this week, as lower output in Brazil, the biggest producer, contributes to a global deficit.
Sugar demand will exceed supply by 3.9 million metric tons this marketing year, the London-based International Sugar Organization said in August. Mills in Brazil's Center South, which make up 90 percent of the country's output, produced 1.63 million tons in the first half of October, down from 2.15 million a year earlier, industry association Unica said Oct. 27.
``People are concerned about the situation in Brazil,'' said Mike McDougall, senior vice president for the Latin America desk at Newedge USA LLC in New York. ``Sugar production is behind.''
Raw-sugar futures for March delivery rose 0.17 cent, or 1.4 percent, to 12.02 cents a pound on ICE Futures U.S. in New York.
Most-active futures still are down 12 percent this month as investors sell commodities to raise cash amid a credit crunch and on concern a recession will reduce demand for raw materials.
``Demand for sugar has shown in the past to be recession- proof,'' with consumption rising close to 2 percent annually on average, McDougall said.
Sugar has gained 11 percent this year, the best performance of the 19 commodities in the Reuters/Jefferies CRB Commodity Price Index.
Source : Bloomberg