Raw Sugar Rises as Rains Continue to Delay Harvesting in Brazil
Sugar climbed for a second day in New York as rains continued to delay harvesting in Brazil, the world’s largest producer. Arabica coffee and cocoa advanced.
About a million metric tons of sugar wasn’t produced due to rains over the past week in Brazil, said Santos, Brazil-based consultancy SA Commodities. The second quarter will have a shortage of 1.5 million to 2 million tons, Luiz Carlos dos Santos Jr., head of sugar brokerage and operations at the company, estimated in a report dated June 8.
“A week of rain has returned to center south Brazil, delaying harvesting and probably reducing industrial yields,” Paul Bannister, head of the sugar brokerage at Marex Spectron Group in London, said in a report e-mailed today.
Raw sugar for July delivery was 1 percent higher at 20.17 cents a pound by 8:45 a.m. on ICE Futures U.S. in New York. White, or refined, sugar for August delivery was up 1.5 percent to $586.40 a ton on NYSE Liffe in London. The price touched $591 a ton, the highest since April 25.
The probability of an El Nino weather pattern later this year, which could cause too much rain in the East and drier weather in the West, as well as “good chunk” of destination buying, notably from China, also helped prices to rise last week, Bannister said. Raw sugar added 4.7 percent in the period.
China bought 840,000 tons of sugar from Brazil in the first four months of the year, while Thailand sold 600,000 tons to the Chinese in the first half, Arnaldo Luiz Correa, a director at Sao Paulo-based Archer Consulting, said in a report.
Delays to the harvest are resulting in higher premiums, according to Swiss Sugar Brokers. Raw sweetener for June loading at the port of Santos, Brazil’s biggest, was at a premium of 0.3 cent a pound to the price of the July contract on ICE, the broker said in an e-mailed report yesterday. That compares with a premium of 0.15 cent to 0.2 cent a pound on June 3.
Arabica coffee for September delivery rose 0.6 percent to $1.584 a pound on ICE. Robusta coffee for July delivery was down 0.1 percent to $2,071 a ton on NYSE Liffe.
Cocoa for September delivery was up 1.8 percent to $2,226 a ton in New York. Cocoa for July delivery rose 1.1 percent to 1,547 pounds ($2,404) a ton in London.
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