(Bloomberg) – Sugar futures fell to a three-week low on forecasts for increasing output in Pakistan and indications that the global surplus may expand. Cocoa, orange juice and coffee prices climbed, while cotton dropped.
Shunaid Qureshi, the chairman of the Pakistan Sugar Mills Association, said today in an interview that production may jump as much as 20 percent to a record 6 million metric tons in the 12 months starting Nov. 1 from a year earlier, signaling export prospects. Global output will exceed demand for the fourth straight year, Rabobank International has forecast.
“The news in Pakistan is bringing the market down,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “We have these surpluses, and demand is decreasing, not increasing. It is going to be really tough for the sugar market to work through its long-term supply.”
Raw sugar for October delivery slumped 1 percent to 16.53 cents a pound at 11:12 a.m. on ICE Futures U.S. in New York. Earlier, the price touched 16.43 cents, the lowest for a most-active contract since June 10. Through yesterday, the commodity dropped 14 percent this year, partly because of a bumper crop in Brazil, the world’s top exporter.
Sugar may plunge as low as 14 cents, Smith said. That would mark the cheapest in three years.
India is Asia’s top producer, followed by China, Thailand and Pakistan.
Cocoa futures for September delivery rose 0.6 percent to $2,172 a metric ton on ICE.
Orange-juice futures for September delivery advanced 1.1 percent to $1.316 a pound, heading for the fourth straight gain.
Arabica-coffee futures for September delivery jumped 2.4 percent to $1.2455 a pound.
Cotton for December delivery fell 0.3 percent to 85.3 cents a pound.
