For the first time on more than five years we can face problem of sugar shortage connected with bigger demand. Australian Green Poll in newest report predicts 5.6 million t sugar shortage in the next 12 months. Maybe it is a signal of beginning new cycle which is connected with climatic anomalies connected with El Nino Effect.
Even if world production of sugar would stay the same, global demand grows 2.5% a year. However last predictions from South Asia, Africa and Latin America are not optimistic:
- India limited production to 26.5 M t;
- Philippines, Vietnam and Indonesia limited forecasts due to long term drought;
- South Africa produced the lowest amount of the sugar in history.
What’s more, there are some concerns about Brasil’s output due to long term rain and Petrobas raising price of oil. It forced people to produce ethanol from sugar cane, not sugar itself. The biggest importer of sugar – China – will produce 10% less sugar, so it will need to buy more from other countries.
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There is big reaction on price of the sugar after all this news. There is bullish trend for 7 weeks already and price just reached another important resistance at 14.06. It is Kumo bottom and line (1/8)P. First level of support is on Senkou Span B 13.53 and then (0/8)P 12.50. If price will stay above this level for next few weeks next resistance will be at Kijun-sen on monthly chart (15.11).
