Sugar Declines in New York on Ample World Supplies
Category: Sugar
(Bloomberg) – Sugar futures fell for a third session in New York on signs that supplies will be ample as near-record output in Brazil’s main producing region extends a global surplus. Coffee gained.
Sugar production in Brazil’s center south, the world’s top producing region, will be 34 million to 35.2 million metric tons in 2013-14, according to the average estimate of six mill owners surveyed by Bloomberg last week. The region produced an all-time high of 34.1 million tons a year earlier. World output in the 2013-14 season that starts in April may exceed demand by 3.8 million tons, a fourth straight surplus, Brisbane, Australia-based researcher Green Pool Commodity Specialists Pty. says.
“We remain bearish on sugar given our estimates for a global surplus,” Morgan Stanley analysts including Adam Longson said today in an e-mailed report. “We believe that the bulk of bullish news is behind us and larger-than-expected production out of Brazil could push supplies even higher.”
Raw sugar for May delivery fell 0.4 percent to 18.13 cents a pound by 6:44 a.m. on ICE Futures U.S. in New York, after declining 3.7 percent last week. White sugar for May delivery was down 0.1 percent to $526.60 a ton on NYSE Liffe in London.
Arabica coffee for delivery in May climbed 0.3 percent to $1.3575 a pound in New York, while robusta coffee for the same delivery month advanced 0.2 percent to $2,143 a ton in London.
Hedge funds were holding the biggest bearish bet in arabica coffee on record as of March 19, the U.S. Commodity Futures Trading Commission said on March 22. Speculative net-short positions totaled 30,162 futures and options contracts.
Bearish investor positions “should facilitate the Brazilian government’s attempts to shore up prices for domestic coffee producers,” Carsten Fritsch, a Commerzbank AG analyst in Frankfurt, said in a report today. “A credible announcement that market interventions will be made to prevent any further price slide could result in short coverings and cause prices to climb.”
Cocoa for May delivery advanced 0.4 percent to $2,168 a ton in New York. Cocoa for the same delivery month rose 0.6 percent to 1,454 pounds ($2,211) a ton in London.
