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Will Climate Change Create A Sugar Famine? Longs Suggested As Global Supply Squeezed - Capital Street FX
Will Climate Change Create A Sugar Famine? Longs Suggested As Global Supply Squeezed
Sugar retreated from four-year highs at 22.28 cents per pound reached earlier today. The commodity has surged more than 40% since the start of this year owing to the El Nino weather phenomenon that has disrupted production in major sugar producing countries and caused a shortfall in the 2015/2016 season.
Researchers are forecasting a global deficit of 7.2 metric tons in the upcoming 2016/17 season after a 7.9 metric ton shortage this season. Sugar output from Brazil’s main central and southern sugarcane growing regions in the second half of August dropped by 14% from the first half of last month to 2.54 metric tons.
Furthermore, a significant strengthening in the Brazilian Real (the local currency) based on belief that the new federal administration will succeed in stabilizing the economy and re-attracting investment, has made the local sugar price less attractive for farmers in the world’s top sugar producer.
Buy Stop at 22.10, Take profit at 22.28, Stop loss at 21.90