Sugar Falls as Brazil Millers Set to Advance Sales; Cocoa Gains
Sugar fell for a third day in New York as millers in Brazil, the world’s largest producer, are set to advance sales to take advantage of a weaker local currency as the 2013-14 harvest there progresses. Cocoa gained.
Brazil shipped 1.44 million metric tons of sugar in the first three weeks of June, up from 1.29 million tons in June 2012, Macquarie Group Ltd., Australia’s largest investment bank, said in a report e-mailed today. The Brazilian real fell 6.9 percent in the past month, providing the worst returns among a basket of 24 emerging market currencies tracked by Bloomberg.
“We’re not convinced we have found a price bottom yet,” said Kona Haque, an analyst at Macquarie in London. “The crush is nearing its peak now, and dry weather is forecast for July and August. This will mean more sugar is on its way.”
Raw sugar for delivery in October slipped 0.2 percent to 16.97 cents a pound by 6:41 a.m. on ICE Futures U.S. in New York, after falling 1.9 percent yesterday. White sugar for August delivery slid 0.1 percent to $507.10 a ton on NYSE Liffe in London. The July raw sugar futures expire today.
The devaluation of the Mexican peso and the Indian rupee will likely prompt these nations to ship more overseas, Haque said. Local prices in India, the world’s second-biggest sugar producer, are weakening because of above-average monsoon rains, adding to mills’ interest in boosting sales overseas, she said.
Arabica coffee for delivery in September gained 0.2 percent to $1.221 a pound on ICE. Robusta coffee for delivery in September gained 0.3 percent to $1,751 a ton on NYSE Liffe.
Robusta coffee fell 10 percent this year and arabica beans slid 15 percent. Global coffee supplies will exceed demand for a fourth year in the 2013-14 season that starts in October in most countries, Societe Generale SA estimated June 12. Production will be 6.85 million bags above demand, following a surplus of 9.1 million bags in 2012-13, the bank said.
Weakening emerging market currencies may also prompt coffee producers to accelerate sales to benefit from the price in U.S. dollars, Haque said.
Cocoa for September delivery was up 0.7 percent to $2,162 a ton in New York. Cocoa for September delivery gained 0.4 percent to 1,455 pounds ($2,217) a ton in London.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.