Sugar Gains Most in Two Weeks as Dry Spell May Curb Output; Coffee Rallies
Sugar prices gained the most in two weeks on concern that dry weather will lower production in Brazil, the world’s biggest producer. Coffee rose the most in nine weeks, while cocoa retreated.
Sugar output in Brazil’s Center South, the world’s largest producing region, will expand less than previously forecast this year after dry weather hurt the crop, according to Unica, an industry group. Production will increase to 33.7 million metric tons from the current crop, less than a March 31 forecast of 34.1 million, the group said yesterday.
“If the dry weather continues, then we may have an even smaller crop than current expectations,” said Bruno Lima, a risk-management consultant at FCStone in Campinas, Brazil.
Raw sugar for October delivery rallied 0.69 cent, or 3.6 percent, to settle at 19.96 cents a pound at 2 p.m. on ICE Futures U.S. in New York. The gain was the biggest since Aug. 12 and capped a third straight weekly increase.
The commodity will average 17.5 cents a pound in the third quarter, up from 15.5 cents in the second quarter, Rabobank International said today.
On NYSE Liffe in London, refined-sugar futures for October delivery added $7.40, or 1.3 percent, to close at $577.30 a ton.
Coffee Rises
Arabica coffee for December delivery gained 6.45 cents, or 3.7 percent, to $1.7885 a pound in New York, the biggest jump since June 24 and the second straight gain. The commodity’s two- day rally eroded the week’s decline to 3.4 percent. The price plunged 8.1 percent on Aug. 24, the most in two years.
In London, robusta-coffee futures increased $40, or 2.5 percent, to $1,637 a ton on Liffe, the biggest gain this month.
Inventories of arabica in ICE-monitored warehouses totaled 2.02 million bags yesterday, the lowest level since May 2000, exchange data show. Robusta stockpiles climbed 0.1 percent in the two weeks ended Aug. 23, NYSE Liffe said in a report on its website after trading ended yesterday.
Cocoa for December delivery fell $22, or 0.8 percent, to $2,718 a ton on ICE in New York. Earlier, the chocolate ingredient slumped to $2,708, the lowest price for a most-active contract since Aug. 19, 2009.
On London’s Liffe exchange, cocoa futures for September delivery dropped 42 pounds, or 2.1 percent, to 1,981 pounds ($3,072) a ton.
To contact the reporters on this story: Debarati Roy in New York at droy5@bloomberg.net; Claudia Carpenter in London at ccarpenter2@bloomberg.net.
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