Sugar Declines as Price Drop Is Seen Needed to Curb Glut
Raw sugar fell the most in a month on prospects of a third consecutive global surplus. Orange juice and cocoa also dropped, while cotton rose.
Global sugar supplies will exceed demand by 6 million metric tons in the 12 months starting in April, Carlos Murilo Barros de Mello, a managing director at Macquarie Group Ltd., Australia’s largest investment bank, said in an interview in Dubai yesterday. Prices have slumped 26 percent in the past year as farmers increased plantings.
Prices will continue to fall on “burdensome global supplies,” Michael Smith, the president of Port St. Lucie, Florida-based T&K Futures and Options Inc., said today in an e- mail.
Raw sugar for delivery in March dropped 2 percent to settle at 18.19 cents a pound at 1:47 p.m. on ICE Futures U.S. in New York, the biggest loss since Jan. 3. Trading volume is about 89 percent higher than the average in the past 100 days for this time of day.
Prices will drop to 17.66 cents this year, according to the mean of 27 analyst and traders estimates compiled by Bloomberg at the Kingsman SA sugar conference in Dubai this week.
U.S. sugar yesterday traded at the lowest premium relative to world prices since at least September 2008, when the data begins. Futures of the domestic sweetener reached 20.81 cents a pound on ICE today, the lowest since April 2009.
Also in New York, orange-juice futures for March delivery dropped 1.5 percent to $1.20 a pound, while cocoa futures for delivery in March fell 1 percent to $2,223 a metric ton.
Cotton futures for March delivery rose 0.3 percent to 81.72 cents a pound on ICE.
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