March 3 (Bloomberg) -- About 17,730 metric tons of sugar was delivered against March futures contracts that expired in New York last week, the smallest in nine years amid a global glut.
The delivery of 349 March contracts, which expired Feb. 28, compares with 3,007 contracts a year earlier and was the smallest for a March contract since 2005, according to data from ICE Futures U.S. Sucden Americas was the only buyer of the raw sugar, Ludovic Herve, the head of trading in Miami said by e-mail today.
Prices in New York tumbled 16 percent in 2013, the third straight decline and the longest slump since 1992. World supplies will outpace demand for the fourth straight season in 2014, the International Sugar Organization has forecast. Raw sugar for March expired at a 1.19 cent-a-pound discount to May futures, a record since that spread started trading in 2011. Lower prices for earlier deliveries, or contango, may signal ample supplies.
“The delivery number identifies that sugar is still a very well-supplied market,” Jeff Dobrydney, a vice president at Jenkins Sugar Group Inc. in Wilton, Connecticut, said by telephone. “We haven’t seen buying pick up.”
Richard Khaleel, a spokesman at Jefferies Bache LLC, the brokerage listed as the receiver on the ICE delivery notice, declined to comment.
Cargill Inc. delivered 186 of the contracts, Corinne Holtshausen, a spokeswoman, said by e-mail. ICE listed ADM Investor Services, J.P. Morgan Securities LLC and Jefferies Bache as the brokerages delivering the sweetener. The supplies were at ports in El Salvador, and in Brazil, the world’s top grower and exporter, the exchange said.
“Prompt raw-sugar futures took a beating on expiry, reflecting the unloved nature of the products mooted for delivery,” Tom McNeill, a director at Brisbane, Australia-based researcher Green Pool Commodity Specialists, said in a report e-mailed today. “Demand is described by traders as ‘dire.’”
Sugar rallied in the past five weeks on speculation that dry weather in Brazil will cut production. Millers in the nation’s main growing region will process 570 million tons of cane in the 2014-2015 season starting in April, according to Copersucar SA, a producers’ cooperative with 47 associate factories. That’s down from a previous forecast of 610 million tons.
“The sharp rally in the last week had more to do with speculators and fund switch from short to long than it did with any market shortage,” McNeill said.
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