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Sugar prices hit two-year high on surging biofuel demand

Bad weather in India, Thailand seen causing supply shortfall

Sugar production in Thailand is also expected to decline due to bad weather. (Photo courtesy of Agriculture and Livestock Industries Corporation)

TOKYO -- Global sugar prices are at the highest level in two years amid growing expectations of short supply this year due to adverse weather in India and Thailand, two key producers.

Mounting tensions in the Middle East are also contributing to the rally in prices as the prospect of higher oil prices are prodding mills into crushing more sugar cane to make ethanol to meet surging demand for the biofuel.

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