(Nasdaq) – Sugar prices jumped Thursday after Brazilian industry group Unica released data showing that mills there processed much less cane during the first half of the month because of heavy rains in the world’s largest sugar-growing region.
Raw sugar for March delivery rose 2.7% to end at 11.86 cents a pound on the ICE Futures U.S. exchange.
The center south region of Brazil, which produces 90% of the country’s cane, crushed 29.6 million metric tons of cane in the first half of this month, a decline of 25.9% from the same period a year earlier, Unica said. Sugar production fell 32.7% to 1.7 million tons and ethanol output declined 20.8% to 1.6 billion liters. That left a production mix of 40% sugar to 60% ethanol, compared with a mix of 43.9% sugar and 56.1% sugar a year earlier.
That left the harvest thus far down 10.9% in sugar production versus a year earlier to 20.9 million tons. Brazil’s government has raised the price of gasoline and re-imposed a tax on it, both of which make ethanol more competitive at the gas pump.
In other markets, cocoa prices ended lower for the first time in seven sessions as traders looked ahead to coming cocoa-processing data that are expected to show a softening demand for the main ingredient in chocolate.
Cocoa for December delivery fell 0.7% to $3,293 a ton on the ICE Futures U.S. exchange, the first decline for the most actively traded contract since Sept. 15.
Cocoanect, a Rotterdam-based trading firm, said emerging markets such as China, India and Brazil, which are generally seen as the main drivers of growth for cocoa consumption, have seen a pullback as slowing demand for raw materials in China reverberates around the world.
“Collapsing emerging-market currencies [have] left traders nervous over demand growth potential, particularly from Asia,” The Hightower report said in a note.
In the second quarter, the Cocoa Association of Asia said commercial demand in the region for grinding–the process by which producers crush roasted cocoa nibs to release cocoa butter and eventually turn them into chocolate products–fell 12% from year-ago levels. It was the fourth consecutive decline, and followed evidence of a decline in North America and barely perceptible growth in Europe.
Third-quarter grindings data are due in mid-October and Cocoanect said it is possible that North America could see double-digit drops in demand, which would mean a fall in global grindings of 5% for the season.
Cocoa prices have remained aloft over concerns about El Nino, which is bringing unseasonable dryness to the largest cocoa-producing regions.
Arabica coffee for December rose 1.8% to $1.183 a pound, cotton for December ended higher, up 0.6% to 60.31 cents a pound and frozen concentrated orange juice for November delivery declined 0.6% to end at $1.1025 a pound.
