Raw Sugar Drops on Signs of Bumper Crops Next Year; Coffee Futures Decline
Raw-sugar prices declined for the first time in three days on speculation that bumper crops in Brazil and India, the world’s biggest producers, will boost supplies next year. Coffee futures also dropped.
Output in Brazil, the top grower, may climb 14 percent to a record 41 million metric tons in the year starting Oct. 1, Peter Baron, the executive director of the International Sugar Organization, said in an interview from Indonesia. India may produce 26 million tons and export about 500,000 tons, he said. Raw sugar rose 3.4 percent in the previous two days.
The outlook is “putting pressure” on prices, said Phil Streible, a senior market strategist at Lind-Waldock, a broker in Chicago. “In the short run, some of this new bearish news had kind of derailed this recent bull rally.”
Raw sugar for October delivery fell 0.2 cent, or 1.2 percent, to 16.97 cents a pound on ICE Futures U.S. in New York. The price has tumbled 37 percent this year on forecasts that rising output will end two years of supply deficits. On July 9, futures reached 17.41 cents, the highest level since April 16.
Prices are “consolidating,” said George Kopp, a senior market analyst at International Futures Group in Chicago. They are “working off an overbought condition,” he said.
Refined-sugar futures for October delivery dropped $1.30, or 0.2 percent, to $519.20 a ton on London’s Liffe exchange.
Arabica-coffee futures for September delivery fell 0.75 cent, or 0.5 percent, to $1.649 a pound in New York.
Robusta-coffee futures for September delivery advanced $10, or 0.6 percent, to $1,731 a ton in London.