Sugar Prices Look Sweet After May

If you're in food manufacture or distribution, you're likely aware of the ongoing saga surrounding sugar prices as it's been unfolding in recent months.

To make a long story short, sugar prices are currently double their standard, their highest in 29 years, due in part to the sudden sugar supply shortage coming out of Brazil and India.

Both countries, the world's largest and second largest sugar exporters respectively, suffered bad weather that have disrupted crops. Rumors of "rust" or sugar cane mold, have been circulating as well, but at this point only appear to be campfire horror-stories designed to leave a sour taste in your mouth.

But if Businessweek is correct in its analysis of sugar prices, your overhead could begin dropping in the latter half of 2010.

Brazil's next sugar-cane harvest will start in May, and in India, imports will more than double to 6 million tons.

This recovery of India's crop alongside the improved production coming out of Brazil is predicted to bring wholesale sugar prices back down to normal by the end of the year.

And that's something very sweet to look forward to.