Sugar futures fell the most in three weeks on mounting concern that supplies will outpace demand amid faltering global economies. Cocoa was unchanged.
Sugar supplies will exceed demand by 7.7 million metric tons in the 12 months ending Sept. 30, up 1.6 million tons from a November forecast, according to London-based Czarnikow Group Ltd., which traded the sweetener in more than 90 countries last year. Equities and commodities fell after a report showed that the European Union’s economy contracted in the fourth quarter.
“The surplus is the big story going into the summer,” Jeff Dobrydney, a vice president at Wilton, Connecticut-based Jenkins Sugar Group, said in a telephone interview.
Raw-sugar futures for May delivery slid 2.6 percent to settle at 24.05 cents a pound at 2 p.m. on ICE Futures U.S. in New York, marking the biggest drop for a most-active contract since Feb. 9. Still, the price is up 3.2 percent this year.
The dollar rose to a two-week high against a basket of major currencies, reducing the appeal of commodities as alternative assets. The Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled the most this year.
“The general atmosphere is one of ‘risk off’ in the commodity world,” Andy Ryan a senior risk manager at INTL FCStone in Nashville, Tennessee, said in a report.
Cocoa futures for May delivery closed steady at $2,283 a metric ton.
In London futures trading, refined sugar sank, while cocoa was higher on NYSE Liffe.