(Businessweek) – Sugar fell for the first time in six sessions in New York as ample supplies will compensate for smaller-than-forecast output in Brazil’s center south, the main growing region of the world’s top producer. Cocoa dropped.
Millers in the center south processed 42.8 million metric tons of cane in the first half of the month and made 2.96 million tons of sugar, Sao Paulo-based industry group Unica said yesterday. That is lower than the 45 million tons of cane and 3.32 million tons of sugar Newedge Group in New York estimated on Sept. 20. While the global surplus will be 52 percent smaller than forecast, production will still be 2.6 million tons higher than consumption in 2013-14, Deutsche Bank AG estimates.
“Any substantial hike in the paper market will be contained by the surplus of sugar,” Jonathan Bouchet, a trader at Boman Capital SA in Geneva, said by e-mail today. “It will be difficult for the market to go back to 19 cents, 20 cents a pound before the end of the year. I would personally stay out of it for now, or sell on spikes.”
Raw sugar for delivery in March slid 0.2 percent to 17.90 cents a pound by 7:22 a.m. on ICE Futures U.S. in New York. Futures trading volumes were more than double the average for the past 100 days for this time of day, according to data compiled by Bloomberg. White, or refined, sugar for December delivery retreated 0.2 percent to $486 a ton on NYSE Liffe in London.
Raw sugar gained to a five-month high yesterday as lower-than-forecast output in Brazil’s center south added to concern about rainfall that may disrupt harvesting. Rains this week in Sao Paulo will hinder the current sugar-cane harvest and may reduce yields, according to forecaster Somar Meteorologia. Precipitation also hampered fieldwork last week.
Losing Streak
The sweetener, down 8.2 percent this year, is heading for a third annual decline. That would be the longest losing streak since 1992. Sugar supplies are estimated to be a record 10 million tons bigger than demand in the season ending this month, says the International Sugar Organization in London.
Arabica coffee for December delivery was 0.3 percent higher at $1.1825 a pound in New York. Robusta coffee for delivery in November was little changed at $1,701 a ton in London.
Cocoa for December delivery fell 0.2 percent to $2,597 a ton on ICE. Cocoa for delivery in the same month slipped 0.5 percent to 1,691 pounds ($2,714) a ton on NYSE Liffe.
