Sugar Falls a Second Day as Slowing Economies May Sap Demand

March 6th, 2012


Category: Sugar

Sugar TRQ(Bloomberg) – Sugar fell for a second day in New York on speculation slowing economies will dent demand just as a forecast surplus is set to become available to the market. Coffee also declined.

Sugar supplies will outpace demand by 7.7 million metric tons this season, up 1.6 million tons from a previous forecast, according to Czarnikow Group Ltd., which traded sugar in over 90 countries last year. The surplus will emerge by mid-2012, the London-based company said in a report e-mailed yesterday. Commodities retreated after Europe’s economy contracted in the fourth quarter.

“The fact that the market will be in a large surplus this year will likely reduce the chance of a strong upside move setting in any time soon,” broker INTL FCStone Inc. said in a monthly report e-mailed yesterday.

Raw sugar for May delivery retreated 1.1 percent to 24.40 cents a pound by 7:22 a.m. on ICE Futures U.S. in New York. Prices dropped 1.1 percent yesterday.

Before today, sugar climbed 5.9 percent this year on speculation supplies would be limited before the start of the harvest in top global producer Brazil. The crop there, which usually starts in the beginning of April, may be delayed by 10 days, according to industry group Unica.

Commodities Fall

Commodities slid after European Union gross domestic product shrank 0.3 percent from the third quarter, the EU’s statistics office said today. The Standard & Poor’s GSCI guage of 24 raw materials fell as much as 0.8 percent.

Arabica coffee for May delivery was down 0.6 percent at $2.0055 a pound on ICE. Cocoa for May delivery was up 0.3 percent at $2,290 a metric ton.

In London, robusta coffee and white sugar declined and cocoa advanced.

To contact the reporter on this story: Isis Almeida in London at

To contact the editor responsible for this story: Claudia Carpenter at

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