- Output in Brazil’s top growing are probably fell in early June
- Prices head for longest string of quarterly gains since 2008
The world is running short on sugar and the tighter supplies are driving prices to the highest in almost four years.
Supplies from Brazil’s Center-South, the country’s top growing region, probably fell 26 percent in the first half of June from a year earlier after rains hindered harvesting, a Bloomberg survey showed. Industry group Unica is set to report the official figures on Friday. Output is tightening just as the nation’s currency is gaining steam, making growers more reluctant to sell to foreign buyers that pay in dollars.
Futures in New York are on pace for a fifth straight quarterly gain, the longest streak since 2008. Drought has devastated India’s crop so badly that the country, the world’s biggest cane grower after Brazil, will be forced to import the most sugar in seven years, a separate Bloomberg survey showed. The tighter supplies comes as world demand for the sweetener is set to climb to a record, according to U.S. government data. Global production will fall short of consumption this season and next, Australia-based researcher Green Pool Commodity Specialists estimates.
The rally was “helped by traders anticipating a potentially bullish Unica report,” James Liddiard, partner at Agrilion Commodity Advisers in New York, said in an e-mail. “An equally dramatic strengthening in the Brazilian real” spurred gains as it deters producer sale, he said.
Raw sugar for October delivery jumped 5.4 percent to settle at 21.01 cents a pound Wednesday on ICE Futures U.S. in New York. Prices earlier touched 21.2 cents, the highest for the rolling most-active contract since October 2012. In London, white sugar for August delivery climbed 3.7 percent to $568.20 a metric ton on ICE Futures Europe, after touching $572.70, also the highest since October 2012.