Breaking News

Tweet TWEET

Sugar Falls Most in 11 Weeks on European Woes; Coffee Declines

Sugar futures tumbled the most in 11 weeks on renewed concern that Europe will fail to contain its fiscal crisis, dimming demand prospects for commodities. Coffee also dropped.

The Standard & Poor’s 500 Index (SPX) of equities fell as much as 1.1 percent after a German government official said the country is pessimistic about the outcome of this week’s EU debt summit. The S&P’s GSCI gauge of 24 raw materials dropped as much as 1.4 percent. Sugar futures have plunged 28 percent this year amid rising supplies and dwindling demand.

“The weaker outside markets are weighing on” sugar, Sterling Smith, an analyst at Country Hedging in St. Paul, Minnesota, said in a telephone interview.

Raw sugar for March delivery slumped 4.7 percent to settle at 23.05 cents a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest drop for a most-active contract since Sept. 16.

A mounting crisis in Europe will mean “less trading finance and a worsening macroeconomic scenario,” Arnaldo Correa, a partner at Sao Paulo-based Archer Consulting, said in an e-mail.

The European Union issued licenses to export almost 700,000 metric tons of sugar in the season that started in October. Applications were made to export 1.29 million tons.

Arabica-coffee futures for March delivery fell 2.5 percent to $2.2985 a pound in New York. The price has dropped 4.4 percent this year after surging 77 percent in 2010.

In London futures trading, refined sugar and robusta coffee also declined on NYSE Liffe.

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.