NEW YORK, Jan 28 (Reuters) - Sugar prices will reach historic milestones by the end of March 2010 as a global supply shortage tightens its grip on the market and increases investor fervour for the sweetener, a Reuters poll showed.
But prices are expected to retreat by the end of the year as the supply crunch eases after the key Brazilian centre south harvest comes on stream.
Below are a selection of comments from 19 analysts and traders on the outlook for prices and supply.
MARIO BOLIVAR, DIRECTOR OF CZARNIKOW SUGAR MEXICO
"(Sugar prices are) up all the way. We don´t know when this thing will stop. We are even amazed at the prices we are seeing in the world market, but we see further strength before we see a drop.
"I don´t remember when we had an in-house view as bullish as we have right now because everything is colliding at the same time - weather (low stocks, production).
Every single fundamental factor is showing that this thing hasn´t stopped yet. So I guess if you are a fund manager and you are seeing what everybody is seeing and the stories are coming out of India, Brazil, the North American market, the limited production over all, you have to be bullish."
STERLING SMITH, COUNTRY HEDGING INC. MINNESOTA
"Weather is going to be the single biggest key fundamental factor going into 2010. If weather problems persist in (the) key growing areas of Brazil, prices will remain firm.
"Funds will be buyers through the first half of the year keeping prices (strong). Assuming India´s monsoon season returns to normal, we should look for trend-following systems to begin reversing positions some time in July."
SERGEY GUDOSHNIKOV, INTERNATIONAL SUGAR ORGANIZATION
"Seemingly, the carnival of high prices is entering its final stage, which may last, say, five-six months.
"A big question here (is) what happens if the weather in Brazil and India (two major origins where supply responses are currently expected), is as bad as in 2009.
"(Fundamentally, we have) the interplay between the expected tightness for the first two quarters of 2010 and a possible return to the ´balanced´ world balance in 2010/11 as a result of anticipated supply response to high world prices, on one hand, and a possible slowing down in consumption growth due to the same factor (high prices)."
GARY MEAD, SENIOR COMMODITY ANALYST, VM GROUP
"I expect investment funds in 2010 will maintain their strong position in sugar due to the strong fundamental supply/demand situation.
"A global economic recovery -- which we expect to make itself felt by H2 2010 -- will stimulate demand recovery and exacerbate the chances of a further global sugar supply/demand deficit in 2011.
"This will keep speculative investment interest at a high, possibly than (the current) level."
NICHOLAS SNOWDON, BARCLAYS CAPITAL
"In terms of fundamental factors and trends in 2010, we would probably divide the year into two. During H1, the key issues will be how the tail end of (the) Brazilian harvest performs, any further downgrades to the Indian production for 2009/10, and finally, the additional import clips that a variety of North African/Middle Eastern/Asian countries are forced to (do) due to shortages.
"In the second half of the year, expectations and weather conditions impacting the next Brazilian harvest (2010/11) and Indian, will be the vital guidance.
"Investment funds will invest on the basis of fundamentals, so we would expect a long bias for the first half of the year at least, with some turning to the short side as we move towards the 2010/11 harvesting year, although prices will be well supported given how much stocks have been run down and only a balanced market expected in 2010/11."
JULIO MARIA BORGES, JOB ECONOMIA IN BRAZIL
"The international sugar market in 2010 will be in a process of increasing the supply in order to adjust to the consumption level. We cannot see excess supply of sugar in the global cash market in the first half of 2010.
"India will be (a) sugar importer in 2010 and will give support to high sugar prices."
Keywords: SUGAR POLL/ANALYST VIEW
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