(Bloomberg) – Sugar fell to a three-year low in London on speculation exports from India will speed up after the end of a cane-price dispute that delayed processing in the world’s second-biggest producer. Cocoa retreated.
All mills in Uttar Pradesh state will start processing cane by Dec. 12 after ending a shutdown, C.B. Patodia, president of Uttar Pradesh Sugar Mills Association, said in an interview yesterday. India is returning to the export market and may ship out as much as 3 million metric tons of sugar, Abinash Verma, director general of the Indian Sugar Mills Association, said in London last week.
“Whenever India is in position to export, there is always growing speculation on government policy for their support to the millers and farmers, crop projection and exportable price,”Naim Beydoun, a broker at Swiss Sugar Brokers in Rolle, Switzerland, said in a report e-mailed yesterday. “The only fact so far, it was reported that over 600,000 tons of raw-sugar sales have been contracted.”
Refined, or white, sugar for delivery in March slid 0.2 percent to $454.10 a ton by 12:18 p.m. on NYSE Liffe in London after touching $453.50, the lowest for a most-active contract since June 2010. Prices lost 13 percent this year.
In New York, raw sugar for the same delivery month fell 0.4 percent to 16.91 cents a pound on ICE Futures U.S. It’s set for a third annual slump. Prices touched 16.90 cents a pound, the lowest for a most-active contract since Sept. 9.
‘Long Tail’
Sugar production in Brazil’s center south, the biggest producer’s main growing region, rose 13 percent from a year earlier in November’s first half, industry group Unica said last week. That signals this year’s crop will “have a long tail”and final output will surpass the expected 34 million tons, according to London-based broker Marex Spectron Group.
“There are plenty of bearish factors,” Robin Shaw, an analyst at Marex Spectron, said in a report e-mailed yesterday.“The surplus is a reality, and probably growing as the tail of the center south Brazil crop continues.”
The premium for white-sugar futures to the raw variety declined 40 percent from this year’s high in June to $81.30 a ton, showing that “whites are in surplus and not expected to improve in the near term,” Shaw said. The gap between the two kinds of sweetener probably will be little changed until the end of the year, according to Beydoun.
Cocoa for delivery in March fell 0.4 percent to 1,752 pounds ($2,877) a ton on NYSE Liffe. Cocoa for the same month slid 0.1 percent to $2,810 a ton on ICE, with futures trading volumes 64 percent below the average for the past 100 days for the time of day, data compiled by Bloomberg showed.
Bean deliveries this season to ports in leading producer Ivory Coast jumped 45 percent from a year earlier to 516,000 tons as of Dec. 1, according to data on the website of KnowledgeCharts, a unit of Commodities Risk Analysis.
Robusta coffee for delivery in January gained 0.2 percent to $1,661 a ton in London. Arabica coffee for delivery in March was 0.6 percent lower at $1.0930 a pound in New York.
