Sugar’s Sweet Ride Could End in 12-Year Highs Like Cocoa

investing.com:

Some food-based commodities that may not have granted their investors a fair handshake before seem to be giving them a lot more now.

First, it was U.S. cocoa, which has returned 40% since the start of 2023 to longs in the game and a compounded 55% for the entire 12 months it has been in rally mode.

Now appears to be ​​turn of raw sugar. Compared with cocoa, the run-up here is only four weeks old. The rally in New York-traded raw sugar futures began in mid-August and has amassed some 10% over the past four weeks after prices hit five-month highs.

What makes it significant, though, is that it’s the longest bull streak in sugar since April, or spring.

And tight supplies could give the sweetener, an ingredient in almost every food preparation and a key biofuel, a shot at 12-year highs ultimately.

If sugar gets there, it would be remarkable because that’s what cocoa did a week back — hit 2011 highs.

Jack Scoville, chief crop analyst at Chicago’s Price Futures Group, said traders were more worried about the lack of sugar exports from India than they are about actual exports from Brazil.

India has gone from being a marginal sugar exporter five years ago to No. 2 in the world, behind only Brazil. The value of Indian sugar exports have soared from just above $810 million in crop year 2017-18 to $4.6 billion for 2021-22.

Commenting on sugar in a Price Futures Group note issued Monday, Scoville wrote:

“The Asian supply situation became more pronounced this week with dry weather the main feature. The Indian monsoon is expected to withdraw early this year and leave sugarcane high and dry. Many growing areas have been dry, anyway.”

“Reports of increased offers from Brazil are still around but other origins are still not offering, and