Sugar rose in London on speculation dry weather in India will cut output, forcing the world’s second-largest producer and biggest consumer to import the sweetener. Cocoa advanced.
Some 96,000 metric tons of raw sugar were scheduled to be shipped to India from Brazil as of Aug. 8, according to Williams Servicos Maritimos Ltda. India’s monsoon, which brings about 70 percent of annual rainfall, has been 17 percent below average since June 1, the India Meteorological Department said. Sugar output in the country may drop to 24 million tons in the season starting in October, Sucden India Pvt said. That compares with 26 million tons in 2011-12, according to the Indian Sugar Mills Association.
“The market may be turning its attention” to India, Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by phone today. The decline in the last few weeks “was not justified by fundamentals, given the weaker crop in India.”
White, or refined, sugar for October delivery gained 0.8 percent to $586.10 a ton by 11:10 a.m. on NYSE Liffe in London, having advanced as much as 1.3 percent earlier, this month’s biggest intraday gain. Raw sugar for October delivery rose 1.3 percent to 21.06 cents a pound on ICE Futures U.S. in New York.
Brazilian sugar is heading to India as the economics for refining and imports for domestic consumption “are beginning to make sense,” Peter de Klerk, an analyst at Czarnikow Group Ltd., said yesterday. The white sugar premium over the raw sweetener rose 9.3 percent in the past month, increasing the incentive to refine. Sugar futures on India’s National Commodity & Derivatives Exchange rose 17 percent in the past month.
Cocoa for December delivery rose 0.4 percent to 1,674 pounds ($2,612) a ton on the NYSE Liffe. Cocoa for December delivery was up 0.1 percent at $2,480 a ton on ICE.
Robusta coffee for September delivery advanced 0.4 percent to $2,174 a ton in London. Arabica coffee for September delivery rose 0.1 percent to $1.697 a pound in New York.
Source: Bloomberg