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White Sugar Benefits from Drought in China

April 8, 2010 at 21:38 by Vladimir Vyun

White sugar gained in London on the prospect for the increased imports by China as the drought may decrease the sugar stockpiles. The Chinese importers may boost their purchases after the sugar production fell because of the drought in the Yunnan province. The sugar output, including beet and cane sugar, may decline to 12 million metric tons this crushing year, down from 12.5 million tons in the previous year.

The refining of the raw sugar imports in Russia dropped 22 percent, compared to the same period in the previous year, from the start of this year through April 1st. Russia may begin importing raw sugar in exchange for the grain shipments.

August delivery for white sugar rose $7.10 (1.6 percent) to $462.70 per ton on the Liffe exchange in London. May delivery for raw sugar retreated 0.6 percent to $0.1607 per pound by 12:37 on ICE. Analysts say that, while the support for the sugar price’s increase is not strong, the fundamentals still can push sugar further up.

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