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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Mr. King: A chart of sugar can be seen at Enter SGG... advanced chart.

February 04 2011 at 12:45 PM Report abuse rate up rate down Reply

And the US subsidizes our sugar industry, why? Nancy Pelosi's favor filled farm bill has cost American taxpayers billions of dollars over the last four years - enough already.

February 03 2011 at 2:33 AM Report abuse rate up rate down Reply
1 reply to pocollins's comment

US sugar tariffs and subsidies have protected the industry for many, many decades ... Nancy Pelosi had nothing to do with it. The guy responsible for first bloating agricultural subsidies -- especially corn and longafter such subsidies were necessary to support a reasonable level of parity -- was Earl Butz, the DOA Secretary under Nixon. You may want to consider removing "agricultural economist" from your list of potential careers.

February 03 2011 at 1:51 PM Report abuse rate up rate down Reply