Global sugar prices rally amid key producer Brazil's presidential election

Global sugar prices surge amid Brazil's presidential election

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Global sugar prices have risen to a 19-month high of 21.10 US cents a pound (30 cents) on October 13, according to ABC News. This surge is attributed to the ongoing presidential election in Brazil, the world's largest sugar producer.

The rally has brought relief to Australian farmers, who faced months of uncertainty due to rising input costs. Raw sugar prices have increased sharply in the past few weeks, reaching a 19-month high after slumping to 13.36 US cents (19 cents) a pound in June.

Brazil's presidential election, which will go to a run-off, has created uncertainty in the sugar market. Analyst Eder Vieto from Green Pool Commodities stated that the recent crop report out of Brazil showed a decrease in the volume of cane crushed, which was expected.

The sucrose content and sugar mix are key factors in determining the yield of the crop based on how much sugar is recovered during crushing and the proportion of sugarcane processed into raw sugar for food versus ethanol for fuel. The recent rally is driven by these factors, which have impacted the global sugar prices.

The higher sugar prices will provide some comfort to farmers, particularly those with expensive inputs, such as fuel. However, speculators and future uncertainty are already putting pressure on the gains made by the recent rally.