Sugar rises on economic outlook

(The Salt Lake Tribune) – Sugar climbed to a six-week high on the first trading day of the year in New York on speculation that economic growth will boost demand. Cocoa also rose, while coffee fell.

Manufacturing in India and China improved in December, according to figures released this week, signaling that the world’s fastest-growing major economies are withstanding Europe’s debt crisis. U.S. manufacturing also expanded more than economists expected last month, the Institute for Supply Management’s factory index showed today.

The reports “were good in a number of places, and that got the ball rolling,” Sterling Smith, an analyst with Country Hedging in St. Paul, Minnesota, said in a telephone interview. “The beginning of the year often brings new money into the market, and I think we’re seeing that today.”

Raw sugar for March delivery rose 4.3 percent to 24.3 cents a pound at 10:03 a.m. on ICE Futures U.S. in New York. Earlier, the sweetener touched 24.36, the highest since Nov. 17. The most-active contract fell 7.9 percent in the last quarter.

Raw sugar and white sugar traded in London have climbed in January for the past four years.

The premium buyers will have to pay to get sugar from Brazil, the world’s largest producer, probably will remain supported this year because the 2012-2013 crop starting in April may be delayed, according to Swiss Sugar Brokers. Logistical constraints will limit shipments from Thailand, the second- largest exporter, the Rolle, Switzerland-based company said yesterday in an e-mailed report.

Cocoa futures for March delivery rose 2 percent to $2,151 a metric ton in New York. The chocolate ingredient fell 19 percent last quarter, the biggest drop on the Standard &Poor’s GSCI index of 24 commodities.

Arabica-coffee futures for March delivery slipped 1.3 percent to $2.239 a pound on ICE.

In London futures trading, refined sugar and cocoa rose, while robusta coffee fell, on NYSE Liffe.