Raw Sugar Drops on Brazilian Crop Outlook; Coffee, Cocoa Fall
Raw-sugar futures fell, capping the longest slump in five months, as concern eased that drought will damage crops in Brazil, the world’s biggest producer. Coffee and cocoa also declined.
Most sugar-cane growing regions in Brazil got rain in the past week, said Kyle Tapley, an agricultural meteorologist at MDA EarthSat in Rockville, Maryland. More precipitation is expected this week. Expedito Rebello, the head of research at Brazil’s Meteorology Institute, has said precipitation will help harvests following a four-month drought.
“The Brazilian weather is potentially good for next year,” said Peter de Klerk, a London-based analyst at C. Czarnikow Sugar Futures Ltd.
Raw sugar for March delivery fell 0.37 cent, or 1.6 percent, to settle at 22.99 cents a pound at 2 p.m. on ICE Futures U.S. in New York. The price dropped for the fourth straight session, the longest slide since early May. The most- active contract touched 22.49 cents, the lowest level since Sept. 21.
The commodity has gained 43 percent since June 30.
“Sugar is taking a pause,” said Jeff Bauml, a senior vice president at R.J. O’Brien & Associates, a broker in New York.
In London, white-sugar futures for December delivery slid $14.10 or 2.3 percent, to $606 a metric ton on NYSE Liffe.
Raw and refined sugar prices have dropped 15 percent this year.
In New York, arabica-coffee futures for December delivery fell 8.6 cents, or 4.8 percent, to $1.725 a pound, the biggest drop since Aug. 24. The price has gained 27 percent this year.
Robusta-coffee futures for November delivery dropped $91, or 5.3 percent, to $1,634 a ton in London.
The robusta harvest in Vietnam, the biggest grower of the variety, will be about 20 million bags, little changed from the previous year, said Andrea Thompson, an analyst at researcher CoffeeNetwork in Belfast, Northern Ireland. That would result in a global surplus of 2 million bags, she said.
“That’s a negative factor,” Thompson said. “That would be the third consecutive year that robusta has been in a surplus.”
Robusta beans, used in instant coffee, are harvested mostly in Asia and parts of Africa. Arabica coffee is grown mainly in Latin America and brewed by specialty companies including Starbucks Corp. A bag weighs 60 kilograms (132 pounds).
Cocoa futures for December delivery dropped $47, or 1.7 percent, to $2,736 a ton in New York. The price has declined 17 percent this year.
In London, cocoa futures for December delivery declined 21 pounds or 1.1 percent, to 1,847 pounds ($2,924) a ton.
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