Raw-sugar futures tumbled the most in a week on mounting concern that a global surplus is expanding as output surges in Brazil, the world’s largest producer. Cocoa also declined, while cotton advanced.
Production of sugar will exceed demand by 12 million metric tons in the season that ends Sept. 31, the most in 15 years, Rabobank International said in a report yesterday. The output surplus will continue into the year that starts Oct. 1, at 3.7 million tons, signaling bigger stockpiles, the bank said. Brazilian mills produced 7.39 million tons of the sweetener from April 1 to mid-June, up 51 percent from a year earlier, according to Unica, a Sao Paulo-based industry group.
“The market is not reacting well to yesterday’s numbers,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in a telephone interview. “Overall, bears are still in control. There’s going to be plenty of sugar out there.”
Raw sugar for October delivery slumped 1.8 percent to close at 17.01 cents a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest decline since June 20. Prices are down 13 percent this year.
In the harvest season started in April, Brazilian mills may process 589.6 million tons of cane, up from 532.8 million a year earlier, according to Unica.
Cocoa futures for September delivery fell 0.8 percent to $2,148 a ton on ICE, the biggest drop since June 20.
Cotton futures for delivery in December rose 0.2 percent to 83.88 cents a pound in New York.