Queensland is set to earn from increasing demand in sugar. The growing demand is setting higher prices for the commodity in the world market.

In London, the price of white sugar for December delivery is $US 642 per metric tonne. The raw sugar futures for March delivery is trading at $US 26.84 a pound in New York. The trading prices are far higher the ones in May.

Unfavourable weather and farming conditions in major sugar growing countries have clipped global production. Brazil and India, the largest sugar growing markets, are currently having supply problems due to these conditions.

In Australia, the same conditions have slowed down harvesting and even caused a drop in production.

As a result, Queensland Sugar now expects to export only 2.9 million tonnes of raw sugar this year. The state sugar export forecast was 3.1 million tonnes.

Queensland Sugar chief executive Neil Taylor remained optimistic of earnings even at a lower than expected export volume because of the rising prices. He said, “For the next six to nine months prices still look very solid because of the strong demand... from every customer in every country.”

Unica, Brazil’s sugar cane industry association estimated its second crop for the season to reach 570.1 million tons from the ongoing 2010-2011 crop season. The crush volume is 4.3 percent lower than the previous estimate in April of 595.9 million tons. However, the estimate is 5.2 percent higher than the 543 million tons crushed in the last crop season.

The sugar association said the dry weather since April brings down the estimate for sugar production to 33.7 million tons. The estimate is only one percent lower than April's estimates but it is 17.8 percent higher than the previous crop season.