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Rice Posed to Gain on Inventories, Sugar Falls on Supply

August 15, 2011 at 18:10 by Vladimir Vyun

Rice is expected to surge as the smallest increase of inventories in five years may create deficit on markets. Stockpiles increased only 1.1 percent this year, compared to 29 percent in the past four years. The estimates of the US Department of Agriculture predicts signal that supply, being 456.2 million metric tons, still exceeds demand (455.2 million tons). Yet market analysts predict that prices will jump 20 percent by the end of this year. So far, prices for rice advanced 15 percent from May.

Sugar fell today on the speculation that India will increase exports, causing supply to exceed demand. On the other hand, China and Indonesia are going to expand their purchases of the commodity, potentially supporting prices. October contract for delivery of raw sugar slipped $0.0022 (0.8 percent) to $0.2762 per pound as of 12:24 on ICE.

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