Sugar May Gain on Brazil Crop, India Export Limit Concerns, Survey Shows

Sugar futures may rise after adverse weather damaged crops in Brazil and on concerns that India may limit exports, according to a survey.

Seven of 11 traders, analysts and brokers surveyed by Bloomberg News said raw sugar traded in New York will advance next week. Three predicted that prices will fall and one estimated little change. Raw sugar has gained 8.7 percent this week on ICE Futures U.S., reaching 31.81 cents yesterday, the highest price for a most-active contract since January 1981.

There’s “a lack of supply to meet demand that’s ongoing in a growing economy,” said Adam Klopfenstein, a senior-market strategist at Lind-Waldock, a broker in Chicago.

Prices have gained 17 percent this year on growing concern that supplies from Brazil and India, the two biggest producers, won’t meet global demand.

Seven of 11 survey respondents said white sugar traded on London’s Liffe exchange will gain, two forecast it will drop and two predicted little change. Yesterday, refined sugar rose as much as 3.8 percent to $777.40 a metric ton on NYSE Liffe, the highest level since at least 1989.

White sugar’s premium over raw sweetener most likely will narrow or be unchanged, according to eight of 11 people surveyed. Three said it will widen.

In the attached chart, red bars are derived by subtracting bearish forecasts from bullish estimates for raw sugar, with readings above zero signaling that most respondents expect higher prices. The green line shows raw-sugar prices, and the blue line shows white sugar.

Bullish on raw sugar: 7       Bearish: 3    Neutral: 1
Bullish on refined sugar: 7    Bearish: 2     Neutral: 2
Widening refined premium: 3   Narrow: 4      Neutral: 4

To contact the reporters on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net; Stephen Morris in London at smorris39@bloomberg.net

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