Rising prices and soaring production make for the kind of combination that commodity producers dream of. It’s this situation that is unfolding for SA’s largest listed sugar producer, Tongaat Hulett. The first sign of a big profit kicker came in Tongaat Hulett’s six months to September. Off a depressed base, operating profit of its SA, Mozambique and Zimbabwe sugar operations jumped 73% to R825m, R19m more than in its full year to March. A number of factors were at work, not least this year’s 29% rise in the SA sugar price. The first hike of 12.5% was in February and the second, of 15%, came in July. On the export front, a 60% rise in world sugar prices this year provided another kicker, taking export prices to almost the same level as SA’s normally far higher regulated reference price. A world sugar supply shortage is at work, and that is unlikely to change soon. "There are emerging concerns [about] the ability of global supply to match demand at prevailing price levels," says Tonga...

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