Sugar rose for a second day in New York and London as Thailand repurchased the sweetener for the first time in more than 30 years, fueling speculation that demand will stay strong as buyers add to stockpiles.
Thailand bought back 74,350 metric tons of domestic-origin sugar from traders today to meet local demand. Global inventories probably will be 33 percent of consumption, equal to 119 days, in the year to Sept. 30, down from 139 days last year and 170 days the year before, said Stefan Uhlenbrock, an analyst at researcher F.O. Licht.
“Global stocks have run down to the lowest level in two decades,” he said in an interview. “This is a major cause for the firm sugar price.”
Raw sugar for October delivery climbed as much as 0.16 cent, or 0.9 percent, to 17.26 cents a pound on ICE Futures U.S. in New York and was at 17.18 cents at 8:45 a.m. local time.
White, or refined, sugar for October delivery rose as much as $9.50, or 1.8 percent, to $528.10 a ton on the Liffe exchange and was last at $522.70. The August contract is at a premium of about $89 to October-delivery sugar, a so-called backwardation that may signal limited supplies.
“Thailand’s purchase in tandem with those of Asian countries has supported prices,” Sudakshina Unnikrishnan, an analyst with Barclays Capital in London, wrote in an e-mailed report today. The nation is the world’s second-biggest exporter of sugar after Brazil.
Some Asian countries must import the sweetener to help meet local demand and keep prices under check. Pakistan has invited bids by Aug. 7 to supply 175,000 tons of refined sugar, and the Philippine government said last week it will purchase 150,000 tons of sweetener after milling was delayed.
Cocoa for September delivery rose $37, or 1.2 percent, to $3,026 a ton in New York. The chocolate ingredient for September delivery gained 13 pounds, or 0.5 percent, to 2,399 pounds ($3,625) a ton in London, the third increase in a row.
Arabica coffee for September delivery advanced 2.75 cents, or 1.7 percent, to $1.663 a pound in New York. Robusta beans for September delivery climbed $17, or 1 percent, to $1,722 a ton in London.