Global sugar supplies not so sweet

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You may be paying more for your morning muffin in the coming months.

On Monday, sugar commodity prices were rising for a second day as news of storm damage to farm fields in Australia and sluggish production in parts of India fueled concerns that global supplies would fall short of meeting demand.

Over the weekend, several analysts were predicting that sugar supply balances would likely be in the red this year. The U.S. Department of Agriculture has forecast that world sugar production would reach 161.9 million tons for this coming 2010-2011 harvest season –- and Australia, a key global supplier of sugar, had been expected to produce up to 4.2 million tons of the crop.

The country’s farmers have been faced with a winter of agricultural discontent. Earlier in the season, floods and rain had cut production estimates by nearly 500,000 tons, according to analysts and media reports.


But in the wake of Tropical Cyclone Yasi, the country’s sugar industry has been slammed. Analysts are predicting that as much as half of the potential sugar fields in Australia’s leading cane districts in Queensland may now be devastated, and that the country’s sugar harvest could be 3.5 million tons –- down from expectations of 4.2 million to 4.3 million tons.

-- P.J. Huffstutter