Buyers of raw sugar from Brazil are getting a bigger discount for their sweetener as output in the world’s top producer advances, according to Swiss Sugar Brokers.
Raw sugar for loading this month at the port of Santos, the country’s biggest, was offered for sale at a discount of 0.55 cent a pound to the price of the March contract on the ICE Futures U.S. exchange in New York, the Rolle, Switzerland-based broker said in a report e-mailed today. That compares with an offer at a discount of 0.4 cent a pound a week earlier. For loading in January, the raw sweetener traded at a discount of 0.4 cent a pound, compared with 0.35 cent a pound in the previous seven-day period, data from the broker showed.
Sugar output in Brazil’s center south, the country’s main growing region, more than tripled in the second half of November compared with a year earlier, according to industry group Unica. Production for the season through Nov. 30 reached 32.9 million metric tons, Unica said. The region’s output may reach a record 34 million tons this season, Paris-based Sucres et Denrees SA estimates.
Unica’s latest report prompted a negative reaction from the physical market, Naim Beydoun, a broker at the company, wrote in the report. Sellers are now offering bigger discounts, “whilst still showing restraint not to offer lower in a void market,” he said, referring to the absence of buyers.
At the port of Paranagua, Brazil’s second-biggest, raw sugar for loading this month was offered at a discount of 0.7 cent a pound, according to Swiss Sugar Brokers. That is bigger than the discount of 0.6 cent a pound offered a week earlier.
In Thailand, the world’s second-biggest sugar exporter, raw sweetener for loading from March to May was at a premium of 0.55 cent to 0.65 cent a pound, unchanged from the previous 7-day period, according to the report. Sugar for the Japanese market, or J-spec, was stable at a premium of 0.6 cent a pound.
Thailand started harvesting its 2012-13 crop on Nov. 15. Output there declined 8.5 percent to 524,973 tons during the first 28 days of the season, according to data from the Office of Cane and Sugar Board as of Dec. 12.
Raw sugar for March delivery fell 0.6 percent to 19.28 cents a pound by 11:11 a.m. in New York.
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.