Sugar Falls to 3-Year Low as Thai Cane Crop Seen Expanding Glut

(Bloomberg) – Raw-sugar futures fell to a three-year low after Thailand, the world’s largest exporter after Brazil, said it will produce a record crop this year.

The cane harvest will jump to 105 million metric tons in the year that starts in November, the most ever, helping to boost sugar output by 10 percent to a record 11 million tons, with about 70 percent set for export, the Bangkok-based Thai Sugar Millers Corp. said today. In May, the International Sugar Organization predicted global output would exceed demand by 20 million tons in the 12 months ending Sept. 30.

“The fact that there’s more coming from Thailand just adds to the supply” surplus, Jack Scoville, a vice president at Price Futures Group Inc. in Chicago, said in a telephone interview. “It’s not bullish at all and there’s nothing positive about the sugar market right now.”

Raw sugar for October delivery dropped 0.7 percent to 16.13 cents a pound at 10:43 a.m. on ICE Futures U.S. in New York, after touching 16.08 cents, the lowest for a most-active contract since July 1, 2010. The sweetener was down 17 percent this year through yesterday, heading for a third straight decline and the longest slump since 1992.

Sugar’s 30 percent drop in the past 12 months is the third largest among 24 commodities tracked by the Standard & Poor’s GSCI Spot Index, after coffee and corn. Prices that rose to a 30-year high of 36.08 cents in 2011 spurred farmers from Brazilto China to boost planting, leading to a global surplus.