The world sugar market is heading for its first deficit in five years as drought cuts supplies in Brazil, the top producer and exporter, RCMA Group Pte said.
The country’s cane harvest may decline about 10 percent in the year starting April 1, said Jonathan Drake, chief operating officer of the Singapore-based trading company. Sugar output may drop as much as 3.5 million tons next year as more cane is used for ethanol, he said in an interview on Oct. 3.
Futures in New York plunged 53 percent from the highest in three decades in 2011 as farmers planted more cane. Dry weather in Brazil and India, the two biggest producers, may cut output and reduce global reserves for the first time since 2010, the U.S. Department of Agriculture estimates. Brazil, which is holding a presidential election, has increased the amount of ethanol used in fuel and may raise gasoline prices, Drake said.
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