Agricultural output in Brazil,which is the leading global sugar harvester, is suffering from the effects of a severe drought in the first-quarter. India, the second largest, is also under threat after an unusually dry start to its monsoon season. Bloomberg experts report that: “Global output will fall short of demand in the year ending Sept. 30, with the gap widening next season.”
India’s tea export business has also been hurt by the drought and more than half way into the monsoon season, many Indian states are reporting deficient rainfall. Experts at the International Rice Research Institute say that this monsoon is worse than even the 2009 season when drought reduced Indian rice production by more than 10 percent.
Bloomberg reports that: “In the five days through June 19, investors pulled almost $24 million from exchange-traded funds that track agriculture. Outflows across commodity ETFs were $119 million. Combined net-wagers across 18 U.S. traded commodities rose 1.3 percent to 1.19 million contracts as of June 17, the CFTC data show.”
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