Raw sugar futures on the New York Mercantile Exchange are heading for a two-month high, as traders fear India, the world's second-biggest sugar exporter, will limit its futures. limit supply for the crop year starting next October.

In recent days, the Indian Government has further tightened rice export restrictions, as the country is urgently addressing the problem of rising food costs, before the general election takes place on next year.

This sparked speculation that sugar could be the next item to be restricted from exporting. The reason is the lack of rain, which risks causing a shortage in India's sugar output, likely leading to a restriction on the export of this product.

Mr. Michael McDougall, Managing Director at Paragon Global Markets, said that India's sugar exports next year are likely to be "frozen", at least until after the election.

On the New York Mercantile Exchange, the price of contracts to buy raw sugar rose for the fourth day in a row, up 2.7% to 25.49 US cents per pound (1 pound = 0.454 kg). This is the highest intraday price since June 22.

Shipments from India are "key" to meeting global sugar demand, after the harvest season in the world's top sugar exporter, Brazil, ends at the end of this year. Concerns about sugar shortages in the first months of 2024 have caused the difference in sugar contract price delivered in March 2024 compared to the contract price delivered in May 2024 to skyrocket.

According to meteorologists at the Rural Clima Meteorological Center, in Brazil, scattered rain will occur in the Central South region, the country's top growing region, for the remainder of this week. Above-average rainfall could disrupt sugarcane harvesting and disrupt loading at major ports, adding to supply concerns./.