Sugar rushed toward a six-month high on Friday, topping 15.4 cents per pound.
The market has sweetened as investors buy sugar on fears of a supply shortfall in Brazil, the world’s largest producer. Poor weather has slowed sugarcane harvest in the South American country, and Brazil is increasingly using its sugar to produce ethanol fuel instead of food, which is reducing supplies available for export.
U.S. corn farmers may feel a pinch from the increased fuel production, as Brazil is the biggest buyer of U.S. corn-based ethanol; if Brazil can better meet its own needs, there will be less demand for U.S. ethanol and corn.
Although prices have climbed almost 20% in the last five months, sugar is still exceptionally cheap compared to its recent high of over 35 cents per pound reached in 2011, a realization that should bring cheer to bakers everywhere.