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First global deficit in six years to lift sugar prices in 2016

After surging in early October due to a rise in Brazilian fuel prices, the world price for sugar has remained strong but volatile. Despite poor harvests in Brazil and the EU, further price rises this year will be limited by the weak Brazilian real, which increases the incentive for mills to produce sugar. Next year, though, we expect output to fall owing to El Niño, leading to a deficit that should support prices.

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