Sugar Prices Hit Three-Decade High on Australia's Heavy Weather

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Sugar prices hit three-decade highs Wednesday due to supply constraints stemming from the monstrous category 5 cyclone that just hit Australia, already suffering from the effects of recent heavy weather that brought floods to the nation.

Raw sugar for March delivery rose to almost 36 cents a pound from 34 cents at the beginning of the day, before falling back to about 35.2 cents in trading on the Intercontinental Exchange. Sugar prices are up more than 65% in the past year, and are at their highest levels since late 1980, according to The Wall Street Journal.

Sugar prices have been on a steady upswing since floods hit Australia in late 2010. Australia is the world's third-largest sugar producer, behind Brazil and Thailand, according to The Wall Street Journal.

Last month, the Australian Bureau of Agricultural and Resource Economics and Sciences said flooding in eastern Australia will cut the country's 2010-2011 agricultural production by as much as $600 million.

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