Sugar gained for the third straight day after central banks moved to ease strains from Europe’s debt crisis, bolstering prospects for global growth and commodity demand.
The Federal Reserve and five other central banks cut the cost of emergency dollar funding for European banks, as part of a global effort to ease the region’s sovereign-debt crisis. The Standard & Poor’s GSCI index of 24 raw materials gained as much as 1.7 percent. The dollar fell as much as 1.4 percent against a basket of major currencies, boosting the appeal of commodities.
“The Fed’s maneuver this morning in concert with other central banks” is lifting the liquidity line, Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “It’s risk-on.”
Raw sugar for March delivery climbed 0.9 percent to settle at 23.69 cents a pound at 2 p.m. on ICE Futures U.S. in New York. The commodity has dropped 26 percent this year.
Exports from India, the world’s second-largest producer, may fall in the season that started in October from a year earlier, said Toby Cohen, a director at London-based Czarnikow Group Ltd., a broker and research. Prices have fallen 8.1 percent this month partly on speculation India’s shipments would increase.
Brazil is the top grower and exporter.