Sugar rose to a five-month high in New York and extended gains in London after the U.S. Department of Agriculture signaled that domestic supplies are dwindling. Cocoa declined.
The U.S. will allow one extra month for sugar imports for the current fiscal year, through Oct. 31, because of “increased tightness” in the U.S. raw-sugar market, the USDA said on its website yesterday. The government last month raised the raw- sugar import quota for the current year by 300,000 short tons. Futures have declined 26 percent this year.
“This is very bullish for the sugar market,” said Jimmy Tintle, an analyst at Transworld Futures in Tampa, Florida. “The tightness in the market is likely to continue.”
Raw sugar for October delivery climbed 0.47 cent, or 2.4 percent, to settle at 19.95 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, it touched 20.07 cents, the highest price for a most-active contract since March 11.
For the week, sugar gained 2.7 percent, its fifth increase in six weeks. Tintle expects prices to rise to 25 cents.
“When the USDA increased the quota, maybe they were not able to obtain the full amount needed,” said Naim Beydoun, a broker and analyst at Swiss Sugar Brokers in Rolle, Switzerland. “Most markets will go up on this news.”
Refined-sugar futures for October delivery jumped $16.90, or 3 percent, to close at $575.40 a metric ton on NYSE Liffe in London, the seventh consecutive gain and the longest winning streak since June 16. The most-active contract had the biggest gain since Aug. 12.
Futures more than doubled last year after excess rain in Brazil and a weak monsoon in India crimped output. Brazil is the world’s biggest producer, followed by India.
India’s monsoon, the main source of irrigation for the nation’s 235 million farmers, was 6 percent below average last week, the weather office said.
Cocoa futures for December delivery fell $65, or 2.2 percent, to close at $2,827 a ton in New York, declining for the third week in a row.
In London, cocoa futures for September delivery lost 5 pounds, or 0.2 percent, to 2,061 pounds ($3,200) a ton, falling for the sixth straight session.