Sugar climbed to a seven-month high on concern that adverse weather will curb output in Brazil, the world’s biggest exporter, and Australia, the third-largest.
Drought in Brazil is harming crops and drying the Amazon River to its lowest level in 47 years. Wet weather in Australia has disrupted crushing and curbed prospects for shipping, said Queensland Sugar Ltd., which handles more than 90 percent of the nation’s exports.
“Supply concerns have become an issue,” said Peter de Klerk, a London-based analyst at C. Czarnikow Sugar Futures Ltd. “With Brazil having shipped most of its incremental export availability, the market will be looking for other origins to fill the supply chain during the off-crop period.”
Raw sugar for March delivery gained 0.58 cent, or 2.4 percent, to settle at 24.98 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 25.11 cents, the highest level for a most-active contract since Feb. 22.
Refined-sugar futures for December delivery rose $11, or 1.7 percent, to close at $644.10 a metric ton on NYSE Liffe in London. The price reached $648.30, the highest level since March 1.
Cane yields in Uttar Pradesh, India’s biggest producer, may be reduced by flooding. About 10 percent of the 2.1 million-hectare (5.2 million acres) crop area is under water, said Kamram Rizvi, an official with the provincial government.
“Concerns are being raised for other Southern Hemisphere producers, while the forthcoming Thai, Indian and Central American harvests are being delayed by wet weather,” Czarnikow’s de Klerk said.
Supplies from India, the world’s second-largest producer, and Brazil remain tight, James Fry, the chairman of U.K.-based commodity consultant LMC International, said yesterday in an interview.
“There’s an expectation that India won’t up its exports in a big way, and that’s why prices are higher,” he said.