Brazil is the largest producer and exporter of sugar. About 21 percent of the world’s sugar is produced in Brazil and 45 percent of total exports also coming from the country.

The South American country is now staring at the driest spell or a drought in 91 years. So the sugar crop is expected to suffer and may fall to 31-33 million tonnes.

Brazil is also the largest producer of coffee as well and thus the caffeine drink's price is also trading at a four-year high.

As a result, the Indian exports have been strong. India exported 5.7 million tonnes at the subsidy of Rs 6 per kg.

There are reports from the industry that they have been contracting exports even without subsidy. Therefore, due to the strong ethanol story and booming exports, this rally will continue.

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(Edited by : Abhishek Jha)