Sugar fell for a third day in London to a six-week low on speculation output will increase in Brazil and India, the world’s largest producers. The nations’ sugar production will climb as farmers increase crop area, Nick Kouchoukos, vice president at Chicago- based researcher Lanworth Inc., told a conference in Dubai yesterday. Brazil’s output will climb 5.1 percent to 35.2 million metric tons in the 2011-12 season, while production in India may jump 24 percent to 25.5 million tons in the year through September, he said. “The lack of bullish news and indications that the Brazilian Center South crop will be higher than the previous season are likely pressuring values modestly,” Keith Flury, an analyst at Rabobank International in London, said in an e-mail today. Center South is Brazil’s main producing region. White, or refined, sugar for May delivery fell $4.10, or 0.6 percent, to $716.50 a ton at 9:51 a.m. on NYSE Liffe in London. Prices reached $713, the lowest level since Jan. 7. ICE Futures U.S., where raw sugar, arabica coffee and cocoa trade in New York, is closed today for the Presidents’ Day holiday. India may have a 6.7 million-ton surplus at Sept. 30, of which 5 million tons will be carried over as reserves into the new year starting Oct. 1, leaving an “exportable surplus” of 1.7 million tons, Abinash Verma, director general of the Indian Sugar Mills Association, told the conference yesterday. ‘Commercial Support’ “With the market talking about swinging into a surplus in 2011-12 and memories of last year’s crash fresh, prices have slipped lower,” Flury said. “However, there has been strong commercial support as values have fallen, and supplies are still tight enough to underpin prices.” A bigger harvest in India and Brazil may help fill a global deficit that sent raw sugar to a 30-year high this month. Prices slid 40 percent in last year’s first half before doubling in the final six months. Hedge-fund managers and other large speculators decreased their net-long position in New York sugar futures in the week ended Feb. 15, according to U.S. Commodity Futures Trading Commission data. Net-long positions, or bets prices will rise, fell by 11,356 contracts, or 7 percent, from a week earlier. Robusta coffee for May delivery gained $18, or 0.8 percent, to $2,355 a ton in London. Coffee-bean exports from Indonesia’s main growing regions on Sumatra island, which plunged 23 percent last year as La Nina rains hurt output, may fail to rebound in 2011 as the weather event lingers, Muchtar Luthfie, head of research and development at the Lampung branch of the Association of Indonesian Coffee Exporters and Industries, said Feb. 18. Cocoa for March delivery added 17 pounds, or 0.7 percent, to 2,297 pounds ($3,724) a ton on NYSE Liffe after gaining for two weeks in a row. Hedge funds are the most bullish on cocoa in almost seven months as political turmoil threatens supplies from Ivory Coast, the world’s biggest producer. In the week ended Feb. 15, net- long positions gained 11 percent to 20,936 futures and options contracts, the highest since July, CFTC data show. To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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