Buyers of sugar from Brazil, the world’s largest producer, are getting a smaller discount for their sweetener, with the amount of sugar awaiting loading at the country’s ports rising 21 percent last week.
Raw sugar for loading this month at the port of Santos, Brazil’s biggest, was at a discount of 0.05 cent to 0.12 cent a pound to the price of the October contract on ICE Futures U.S. in New York, Swiss Sugar Brokers said in a report dated yesterday. That compares with 0.2 cent a pound on Sept. 1. A cargo of raw sugar for loading in Santos traded at a discount of 0.08 cent a pound last week, according to SA Commodities.
About 2.3 million metric tons of sugar awaited loading at the ports of Paranagua and Santos on Sept. 5, according to e-mailed data from shipping agency Williams Servicos Maritimos Ltda. That’s up from 1.91 million tons a week earlier, said the Recife, Brazil-based company.
“Shipments to the Far East and to the traditional refineries in the Middle East and North Africa are maintaining a good shipping rate,” Naim Beydoun, a broker at Swiss Sugar Brokers in Rolle, Switzerland, said in the report.
The white sugar premium over the raw variety has climbed 38 percent so far this year to $122.04 a ton, making refining more attractive even as demand remains weak, he said. A “hesitant strengthening of cash values for September shipment” is in conflict with the fundamentals of the sugar market, he said.
Global sugar supplies will be 5.9 million tons higher than demand in the season starting in October, according to the International Sugar Organization. That is up from a surplus forecast of 5.2 million tons in 2011-12, the London-based sugar group estimates.
White, or refined, sugar for March delivery was up 0.2 percent to $550.30 a ton by 10:15 a.m. on NYSE Liffe in London. Raw sugar for October delivery rose 0.3 percent to 19.43 cents a pound on ICE.