Raw sugar in New York may climb to 40 cents a pound by January on concern dry weather in Brazil, the biggest exporter, and record rainfall in Australia may tighten supplies, said the Thai Sugar Millers Corp. “Bad weather conditions are threatening crops around the globe,” said Vibul Panitvong, executive chairman of the company that represents the country’s 46 millers. Thailand is the world’s second-largest exporter. Raw sugar in New York yesterday gained to the highest level in 30 years on speculation that shipments from Brazil and India, the top producers, may be too low to meet demand. Rain in Queensland state this month after Australia’s wettest spring on record forced producers to leave some cane unharvested. “Frost in Florida and heavy snow in Europe will also worsen the supply situation,” said Vibul. The U.S. is considering increasing imports by 300,000 metric tons in 2010-2011, while European countries may not have adequate supply for overseas shipments this year, he said. Freezing weather in Florida, the biggest U.S. producing state, earlier this month “severely damaged” cane crops, U.S. Sugar Corp said Dec 17. About 60 percent of the mature crop hasn’t been harvested, and new plants faced temperatures “significantly below” 28 degrees Fahrenheit (minus 2.2 Celsius) for four hours, it said in statement. Global sugar demand will reach 165.3 million tons, almost 3 million tons more than supply in the marketing year that ends Sept. 30, ABN Amro Bank NV and VM Group said Dec. 10, reversing an earlier forecast for a surplus. Dry weather early in the growing season and rain during harvest hurt crops in Brazil, it said. Wet Weather Raw sugar for March delivery on ICE Futures U.S. gained 2.6 percent to 33.98 cents per pound yesterday. The price earlier reached 34.06 cents, the highest level for a most-active contract since November 1980. The exchange is closed today for the Christmas vacation. Sugar production this year in Australia may be 3.62 million tons, compares with a usual range of between 4.5 million to 5 million tons, industry group Canegrowers said Dec. 22. More than 5 million tons of cane would be unharvested this season because of wet weather, causing a “continued dampening of productivity and profitability in 2011,” the Brisbane-based group said. Thai Output Still, sugar production in Thailand may increase 5.8 percent from the previous year as wet weather improved yields after drought earlier this year parched cane plantations, said Vibul. “Rains have improved yields, potentially boosting sugar output to be higher than last year,” said Vibul. Output in the year started Nov. 27 is likely to be around 7.3 million tons with cane output estimated about 67.5 million tons, he added. That compared with 6.9 million tons and cane production of 68.5 million tons in the previous year, according to the Office of the Cane and Sugar Board, an industry regulator. Recent rains will probably boost production yields to 108 kilograms per ton of cane from 101 kilograms in the previous crop year, Vibul said. The La Nina weather event has brought heavier-than-usual rains across Asia, hurting production of rice and rubber and boosting prices. Shipments may be 4.8 million tons in 2011, Vibul said. That is higher than 4.4 million tons estimated by the Office of Cane and Sugar Board. China Demand China, the world’s biggest food consumer, may import as much as 3 million tons of sugar in 2011 on increasing consumption of food and sweets, Vibul said. The country may have a refined sugar shortage of 2.5 million tons in the 2010-2011 marketing year that needs to be met by imports or selling from reserves, the China Merchandise Reserve Management Centre said Dec. 1. Demand is projected to be 14.5 million tons, while output may be 12 million tons, Xie Liangjun, a researcher at the country’s sugar reserve manager wrote in a report on the agency’s website. China’s central government has built up sugar reserves of 3.2 million tons, Commerce Minister Chen Deming said Dec. 22. To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net To contact the editor responsible for this story: Richard Dobson at Rdobson4@bloomberg.net

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