June 10 (Bloomberg) -- Buyers of raw sugar from Brazil, the world’s top producer, are paying a bigger premium for the sweetener as demand emerges in the Far East and traders close out bets on lower prices, according to Swiss Sugar Brokers.
Brazilian sugar for loading this month at the port of Santos, the country’s biggest, was at a premium of 0.05 cent to 0.1 cent a pound last week to the price of the July futures on ICE Futures U.S. in New York, the Rolle, Switzerland-based broker said in a report e-mailed today. That compares with no premium or discount for the previous time it traded, it said.
“The nearby trades are physical short covering against some emerging demand seen from the Far East,” Naim Beydoun, a broker at the company, wrote in the report, referring to traders purchasing contracts to close out bets on lower prices. “Values firmed up on the nearby as well on the forward.”
The amount of sugar waiting to be loaded at ports in Brazil rose 4.9 percent in the week ended June 5 as vessels headed for China, Bangladesh, Algeria and Malaysia, according to Williams Servicos Maritimos Ltda. Sugar waiting to be loaded onto ships at Recife, Maceio, Paranagua and Santos, the country’s biggest port, totaled 1.6 million metric tons, according to the Recife, Brazil-based shipping agency said.
Raw sugar from the South American nation for loading at the port of Santos next month traded at the same price as on the exchange, according to Swiss Sugar Brokers. On May 29, the discount was 0.05 cent a pound to 0.1 cent a pound, data from the broker showed.
“The forward trades should be more a spread positioning rather than any anticipated demand,” Beydoun said.
Raw sugar for delivery in July was little change at 16.44 cents a pound 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.