Sugar futures on the Intercontinental Exchange staged their biggest daily gain in nearly 23 years after forecasts suggested weather-disrupted supply may fall short of demand.
The inter-government International Sugar Organization said that the market will record a deficit of 5 million metric tons of sugar in the current year due to adverse weather.
This year's supply shortfall will be the first deficit in five years as harvests are hit by the El Nino weather phenomenon and heavy rain in Brazil, the world's largest producer.
Even with the rebound, Australian bank ANZ said it believes 2016 and 2017 futures are undervalued and have room to gain to average 15-17 cents per pound as they have been oversold.
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