India Sugar, Cotton May Be Damaged by Tropical Storm, MDA Forecaster Says

An area of thunderstorms near the Indonesian island of Sumatra may develop into a tropical cyclone this weekend and damage sugar and cotton crops in India, weather forecaster MDA Information Systems Inc. said.

“Sugar and cotton will be impacted the most,” Donald Keeney, an MDA meteorologist, said today by telephone from Rockville, Maryland. A cyclone would “certainly slow the harvest and cause some pretty decent quality declines as well.”

Cotton futures, up more than 70 percent since June 30, touched a record today on concern that global supply won’t meet demand. Sugar has gained more than 80 percent since the end of June. India is the world’s second-biggest grower of both crops.

A tropical cyclone would bring winds with gusts up to 90 miles per hour (145 kilometers per hour) and as much as 3 inches (7.6 centimeters) of rain to parts of India on Nov. 7, MDA said.

“It’s all going to come down to how strong the winds become,” said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. “That’s really the biggest threat to both of those crops.”

Indonesia is battling to recover from natural disasters amid seas that are forecast to remain rough until Nov. 8, the country’s Meteorology, Climatology and Geophysics Agency said. The country’s Mount Merapi has erupted three times this week. A tsunami on Oct. 25 left 431 people dead and the nation is now being hit by 20-foot (6-meter) waves from Tropical Cyclone Orchid.

A separate group of storms will probably cross the Indian Ocean and Bay of Bengal, reaching the southern tip of India and also develop into a cyclone, MDA said.

Cotton for December delivery rose by the exchange maximum of 5 cents, or 3.9 percent, to $1.3426 a pound at 2:14 p.m. on ICE Futures U.S. in New York, the highest price in 140 years of trading.

Raw-sugar futures were up 0.67 cent, or 2.3 percent, to settle at 30.12 cents a pound on ICE. Earlier, the price climbed as much as 4 percent to 30.64 cents, the highest level since 1981.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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