Wilmar Said to Take Smallest ICE Sugar Delivery Since 2006Marvin G. Perez and Isis Almeida
About 152,763 metric tons of sugar was delivered in transactions involving New York futures contracts amid shipping bottlenecks in Brazil, the world’s top producer and exporter.
The delivery of 3,007 expiring March contracts compares with 17,325 contracts a year earlier and was the smallest for a March contract since 2006, according to ICE data. Wilmar International Ltd. was the only buyer of the raw sugar, according to two people familiar with the transaction, who declined to be identified because they are not allowed to speak to the media.
A record backlog for grain shipments at Brazil’s Port of Santos last month may delay sugar exports from the country. About 1.47 million tons of sugar is at Brazil’s main ports today compared with 238,100 tons a year earlier, according to data from SA Commodities in Santos compiled by Bloomberg.
“The delivery was the smallest in seven years and basically is due to the absence of Brazilian sugar,” Michael McDougall, a senior vice president for Newedge Group in New York, said in an e-mail. “We believe this has to do with brisk demand for Brazilian sugar in late 2012 and early 2013 and concern over the logistic bottleneck being caused by record corn and soy crop exports.”
Singapore-based Wilmar entered the sugar business in 2010 through the acquisition of Sucrogen Ltd. in Australia, according to the company’s website. Sucrogen owns eight mills in Australia. Richard Khaleel, a spokesman at Jefferies Bache LLC, the brokerage listed as the receiver on the ICE delivery notice, did not respond to phone calls and e-mails seeking comment.
Firms including ADM Investor Services, J.P. Morgan Securities LLC, Jefferies Bache, Term Commodities and UBS Securities LLC will deliver the sweetener, ICE data show. The supplies were at ports in El Salvador, Honduras, Costa Rica and in Brazil, the exchange said. Term Commodities is a unit of Louis Dreyfus Holding BV.
Raw-sugar futures for May delivery dropped 2.6 percent to 17.91 cents a pound at 1:32 p.m. on ICE in New York. Prices slid 2.1 percent last month, the second straight decline.
The contract for March delivery expired yesterday, and today is the so-called first notice day, when traders must indicate whether they intend to accept physical supplies.
Yesterday, raw sugar for March delivery expired at a discount of 0.01 cent a pound to the May futures. That reduced the incentive for traders to deliver sugar that is trading at a premium to the exchange, said Fabienne Pointier, an analyst at Lausanne, Switzerland-based Kingsman SA, owned by McGraw-Hill Cos.