BLBG: White Sugar Declines in London Trading as Dollar Strengthens
By M. Shankar
Feb. 4 (Bloomberg) -- White sugar fell the most in a week in London as the dollar strengthened, diminishing the appeal of commodities as an alternative investment.
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, added as much as 0.7 percent, reaching its highest since July. The S&P GSCI Index of 24 raw materials dropped 2.3 percent.
“It is the dollar and the market is pausing a bit,” said Nick Hungate, a trader at Rabobank International in London. “We are going to see a lot of volatility and the fundamentals are still robust.”
Prices doubled last year as excess rains in Brazil and a weak monsoon in India hurt sugar-cane output from the world’s two biggest growers. Global demand for sugar will outpace supply by 13.5 million metric tons in the 2009-10 season, according to broker Czarnikow Group Ltd.
White, or refined, sugar for May delivery fell $7.70, or 1 percent, to $728.90 a ton on the Liffe exchange at 3:46 p.m. local time. Refined sugar last month climbed to $767, the highest level in at least two decades. Raw sugar for March delivery fell 1.4 percent to 28.17 cents a pound on ICE Futures U.S. in New York.
Mexico, the world’s sixth-largest sugar producer, may boost imports to the highest in at least 16 years as dry weather hurts domestic output. Imports may surge to as much as 600,000 tons this year, Alejandro Penaloza, chief financial officer of Mexico City-based Chocolates Turin and president of Mexico’s chocolate and candy makers association, said in an interview.
Cocoa Slips
Cocoa for March delivery slipped 0.4 percent to 2,235 pounds ($3,527) a ton on Liffe.
Cocoa deliveries to Ivory Coast’s ports of Abidjan and San Pedro from farms in the interior totaled 22,646 tons in the week to Jan. 31, down 26 percent from a year earlier, according to an industry official with access to the data.
The West African country is the biggest producer of cocoa.
Robusta coffee for March slid $14, or 1.1 percent, to $1,310 a ton.
To contact the reporter on this story: M. Shankar in London at mshankar@bloomberg.net.
