Raw sugar futures prices on the New York Mercantile Exchange are heading for their highest close in two months, as traders fear India, the world's second-biggest sugar exporter, will limit limit supply for the crop year starting next October. In recent days, the Indian Government has further tightened rice export restrictions, as the country urgently tackles the problem of rising food costs, ahead of general elections on next year.

This raises speculation that sugar could be the next product to be subject to export restrictions. The reason is the lack of rain, which risks causing a shortage in India's sugar output, likely leading to a restriction on the export of this product. Mr. Michael McDougall, Managing Director at Paragon Global Markets, said that India's sugar export activities in the next crop year will likely be "frozen", at least until after the election.

On the New York Commodity Exchange, the price of raw sugar contracts increased for the fourth consecutive day