AUSTRALIA: Queensland Sugar says prices to remain firm
Published: 11/20/2009, 9:06:08 AM
Queensland Sugar says prices for sugar, the second-best performing commodity in the past year, will remain firm as global production lags behind demand, according to Bloomberg.
"We've had a strong run," Alan Winney, chairman of the company that ships 95% of the nation's raw sugar exports, said in an interview with Bloomberg Television. "We are going to have prices that will stay fairly firm for the next 12, maybe 18 months."
Sugar prices are up 98% in the past year, making it the No. 2 commodity as measured by the Standard & Poor's GSCI Commodity Index, trailing only silver.
"High prices will encourage increased production, but there is limited capability to increase production in the short term," Winney said in Melbourne.
"There's minimal production increases in five or six countries, but not enough to turn the world market from the current 11 million-tonne deficit to anything at all that looks like a surplus," Queensland Sugar's Winney said. "We are still looking like a 6 million-ton deficit for the next 12 months."