Sugar prices have significantly gained over the week as demand for the sweet commodity is increasing.
 
Rising speculation that demand in Asia is picking up and talks that China may issue another half million tons of sugar import quota, or more, on top of the 1.9 million tons a year, could push the price of sugar higher. An Indian commodity trader has already won a bid to supply an extra 30,000 metric tons of refined sugar to China. Sugar demand in China, the world’s second-biggest consumer, is strong and sales from state stockpiles are unlikely to make up for the domestic shortage.
 
This increases the possibility of more imports, which could inevitably push up prices. Analysts expect local demand in China to outstrip supply by more than two million tons as production is projected to decline for the third year. Adding to the increase demand in sugar, according to the world’s largest food company Nestle, are consumers from the EU. According to Nestle, sugar stockpiles in the EU are also too low to meet demand as constrained imports and adverse weather has hurt production. The current demand for spot sugar has helped to drive up prices of futures contracts. Sugar for October delivery has jumped over 4% in the past week to 29.18 cents a pound, as of 12pm (London time) on Thursday.