BLBG: White Sugar Climbs to a Two-Week High as Global Stocks May Remain Limited
White sugar rose for a sixth day to a two-week high in London amid speculation world stockpiles will remain limited as India may curb exports of surplus sweetener to build up depleted domestic inventories.
India will have “adequate” sugar for local use in the year started Oct. 1, with output seen at 24.5 million metric tons and domestic use at 22.5 million to 23 million tons, Junior Farm Minister K.V. Thomas wrote to legislators today. Stockpiles from the previous season were 5.1 million tons, he said, after two years in which supply trailed demand.
“There is still quite a tight supply situation, with stocks worldwide at a very low level,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by phone. For India, “the question is whether they can actually afford to export sugar without the risk of keeping inventories at quite low levels.”
White, or refined, sugar for March delivery added $1.50, or 0.2 percent, to $729.30 a ton at 11:51 a.m. on NYSE Liffe after reaching $734, the highest level since Nov. 11. Prices have climbed 56 percent in the past six months and 0.7 percent in November.
“There are concerns on sugar-recovery levels in the India cane crop, which means further delays in any export announcements,” Kona Haque, an analyst at Macquarie Bank Ltd. in London, said in an e-mailed comment. “Plus Brazil’s cane crop is tailing off sharply. The first quarter will be very tight, and prices are reacting accordingly.”
Brazilian Production
In Brazil’s Center South, the world’s largest producing region, sugar output fell about 5 percent to 1.46 million tons in the first half of November, industry association Unica said yesterday. About 92 percent of the crop was harvested as of Nov. 15, and 76 mills had stopped crushing, compared with 17 a year earlier, the group said.
“There is some kind of supply squeeze,” Fritsch said. “The Brazilian harvest is almost over, sooner than expected. We see some harvest delays in India due to the excessive rains. There’s no bridge between the end of Brazilian harvest and the delayed Indian harvest.”
Raw sugar for March delivery added 0.19 cent, or 0.7 percent, to 28.54 cents a pound on ICE Futures U.S. in New York after reaching 28.84 cents, the highest level since Nov. 19.
Cocoa for March delivery rose 0.2 percent to 1,869 pounds ($2,901) a ton on NYSE Liffe. The chocolate ingredient for March delivery gained 0.1 percent to $2,759 a ton in New York.
Robusta coffee for March delivery slipped 0.4 percent to $1,791 a ton in London. Arabica beans for March delivery fell 0.1 percent to $2.024 a pound in New York.
To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
