(Bloomberg) – Sugar futures in New York dropped to a five-week low and prices in London fell on speculation Brazil’s new crop will add to stockpiles. Cocoa declined.
Raw sugar has dropped 9 percent this year, after falling 16 percent last year. Brazil’s center south cane harvest used to make sugar that usually starts in April will expand to 587 million metric tons from 532.3 million tons last year, Brazilian research company Datagro forecast on March 19.
“We still argue that the sugar market is in a significant surplus and that initial signs for the upcoming 2013-14 Brazilian sugar cane crop suggest further inventory build-up,” Tobias Merath, head of commodity and alternative investments research at Credit Suisse Group AG private bank in Zurich, said in a report dated today. “Our long-term bias on the market is negative.”
Raw sugar for May delivery fell as much as 0.2 percent to 17.75 cents a pound on ICE Futures U.S. in New York, the lowest since Feb. 15, and were at 17.76 cents a pound by 5:38 a.m. local time. White sugar dropped to $506.20 a metric ton, the lowest since Feb. 26.
Some traders may be buying back bets on lower prices, a so- called short-covering rally, because of potential shipping delays out of Brazil, Merath said. Sugar may not fall much below 17 cents a pound, he said.
In London, cocoa fell 0.1 percent and robusta coffee droped 0.2 percent.
