Buyers of raw sugar from Brazil, the world’s largest producer, are getting a bigger discount for the sweetener as demand slows, according to Swiss Sugar Brokers.
Raw sugar for loading this month at the port of Santos, the country’s biggest, was at a discount of 0.2 cent a pound to the price of the October contract on ICE Futures U.S. in New York, the Rolle, Switzerland-based broker said in a report e-mailed Sept. 1. That compares with a discount of 0.1 cent on Aug. 26.
“The physical values have been eroding with the time span,” Naim Beydoun, a broker at the company, wrote in the report. “The market is still not fully convinced that there is enough demand.”
Sugar cane processing in Brazil’s center south, the main growing region, jumped 14 percent to 44.2 million metric tons in the first half of August, helped by dry weather, according to industry group Unica. Harvesting will accelerate with dry weather forecast for the next three weeks, said Celso Oliveira, a weather forecaster at Sao Paulo-based Somar Meteorologia.
In Thailand, the world’s second-biggest shipper, raw sugar from the new season that starts in November was offered at a premium, Swiss Sugar Brokers data showed. The raw sweetener for loading from Jan. 15 to Feb. 15 was at a premium of 0.8 cent a pound to the price of the March contract on ICE, unchanged from last week.
Sugar futures fell 13 percent last month to 19.78 cents a pound as a forecast surplus became available to the market, with the harvest accelerating in Brazil. Option bets on a “counter- trend rally” next year provided some of the support to futures prices, broker and researcher Kingsman SA said in a report e- mailed today.
“The market looks confined to a range of 19.5 cents a pound to 20.5 cents a pound,” Beydoun said.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.