Sugar Falls the Most in 4 Weeks on Expanding Supply; Cocoa Rises
Sugar production in India will be 25 million metric tons in 2013-14, 5.5 percent more than estimated in July as the best monsoon rainfall in almost two decades boosts yields, the Indian Sugar Mills Association said on Sept. 16. An “excellent monsoon” will also mean bigger output in China and Thailand, the second-biggest exporter, Tom McNeill, a director at Brisbane, Australia-based sugar and biofuels researcher Green Pool Commodity Specialists Pty. said by e-mail today.
“We boosted our China production forecast to over 13 million tons last week, and the Thai crop also seems to be firming for around 11 million tons,” McNeill said in a report e-mailed today. “India’s output is also expected higher, with raw exports being touted for early in an early harvest.”
Raw sugar for delivery in March fell 0.9 percent to 17.59 cents a pound by 7:07 a.m. on ICE Futures U.S. in New York. The price fell as much as 1.2 percent, the most since Aug. 27. White sugar for December delivery slid 0.4 percent to $484.30 a ton on NYSE Liffe in London.
Chinese production will expand in the 12 months starting Oct. 1 from a previous forecast of 12.8 million tons, McNeill said. While Thailand is currently set to produce 10.8 million tons in the period, output may reach as much as 11 million tons, he said. That compares with 10 million tons in 2012-13. Indian exports are forecast to reach as much as 3 million tons in 2013-14, Marex Spectron Group said in a report e-mailed today.
Raw sugar futures, down 9.8 percent this year, are heading for a third annual decline, the longest slump since 1992. Supplies will outpace demand by a record 10 million tons in the season ending this month, estimates the International Sugar Organization in London. A smaller surplus of 2 million tons is forecast for next season, according to Czarnikow Group Ltd in London, which traded 2.4 million tons of raw sugar in 2012.
Large and small speculators excluding index funds turned bullish raw sugar traded in New York in the week ended Sept. 17, U.S. Commodity Futures Trading Commission data compiled by Bloomberg showed. Their net-long position was 20,371 contracts from a net short of 6,906 lots in the previous seven-day period.
“You can either take that as a confirmation that they have now recognized that ‘the future is bullish,’ or that they are accumulating ammunition with which to sell the market,” said Robin Shaw, an analyst at Marex Spectron. “No one seems to have a strong view on sugar today.”
Arabica coffee for December delivery rose 0.6 percent to $1.1535 a pound by in New York. Robusta coffee for delivery in November was 0.1 percent lower at $1,677 a ton in London.
Cocoa for December delivery rose 0.3 percent to $2,616 a ton on ICE. Cocoa for delivery in the same month gained 0.3 percent to 1,705 pounds ($2,737) a ton on NYSE Liffe.
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