Sugar Rises to Seven-Month High on Supply Concern; Coffee Jumps
Sugar futures rose for a fifth straight session amid global supply concerns, extending a rally to a seven-month high. Coffee had its biggest gain in a month.
Flooding in Pakistan ruined crops valued at $3.27 billion, including 10.4 million metric tons of standing sugar cane, Farm Minister Nazar Muhammad Gondal said today. A drought in Brazil, the world’s biggest producer, is harming crops and drying the Amazon River to its lowest level in 47 years.
“Dry weather in Brazil and flooding in other regions is causing a lot of concern,” said Marius Sonnen, the president of Sonnen & Co., a New York-based sugar trader.
Raw sugar for March delivery gained 0.31 cent, or 1.2 percent, to settle at 25.29 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 25.35 cents, the highest level for a most-active contract since Feb. 22. The commodity has surged 11 percent in the past week.
Sugar may rise to 30 cents, Sonnen said.
In London, refined-sugar futures for December delivery rose 90 cents, or 0.1 percent, to close at $645 a ton at 5:30 p.m. local time on NYSE Liffe.
Arabica coffee futures for December delivery rose 6.7 cents, or 3.7 percent, to $1.8895 a pound in New York, the biggest gain since Aug. 27.
“There is some technical buying,” said Boyd Cruel, a senior analyst at Vision Financial Markets in Chicago. Cruel expects prices to rise to $1.94 a pound.
In London, robusta-coffee futures for November delivery advanced $30, or 1.7 percent, to close at $1,766 a ton. Earlier, the price reached $1,773, the highest level since Aug. 24.
Robusta climbed on concern that supplies from Vietnam, the biggest grower of the variety, may be limited.
No Forecast
The Vietnam Coffee and Cocoa Association has yet to make an estimate on the nation’s production. The absence of a forecast before the harvest, which usually starts in November, probably will drive prices higher, said Andrea Thompson, an analyst at Belfast, Northern Ireland-based research company CoffeeNetwork.
“There has been awareness that if robusta is going to go higher, it’s going to be in this period before the new crop flow begins, with the Vietnamese harvest particularly,” she said.
Arabica is grown mainly in Latin America and brewed by specialty companies including Starbucks Corp. Robusta beans, used in instant coffee, are harvested mostly in Asia and parts of Africa.
To contact the reporters on this story: Chris Kay in London at ckay5@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
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