Sugar prices spike to a decade high on rising worries of a global shortage

Sugar prices in New York rose nearly 2% Wednesday and have surged 19% so far this year.

• Sugar prices have jumped 19% so far this year to hit the highest level in a decade. 
• The surge comes amid growing fears of a global supply shortage.
• India will not expand its export quota, while other producers do not have strong stockpiles.

Raw sugar prices touched their highest level in a decade, as the prospect of a global supply shock intensified.

Prices in New York rose as much as 1.9% Wednesday before paring gains, after they jumped 2.6% on Tuesday, according to Bloomberg.

Sugar prices have surged 19% so far this year. The latest moves come on news that India — a major producer whose shipments are determined by quotas — will not increase exports in the September season. 

Meanwhile, stockpiles in Brazil are low, due to a late harvesting start caused by a significantly rainy season. And supplies are also lagging in Europe, Pakistan, Thailand, China and Mexico.

Also affecting sugar prices is Friday's white-sugar contract expiry for May, with many traders expected to close their short positions.

Prices in London for refined white sugar slipped 1% Wednesday. But on Tuesday, they climbed 2.7% to their highest level since 2011. That sent the so-called white premium, the difference between refined and raw sugar, to a record high on Tuesday.

In 2011, the commodity reached a 30-year high after detrimental weather hit global producers and caused a significant deficit.