Sugar Falls on Ample Supplies; Orange Juice, Cocoa DropMarvin G. Perez
Sugar futures fell on speculation that sales by producers will cap rallies amid signs of lower import demand from China. Orange juice, cocoa and coffee dropped, while cotton rose.
Output in the main growing region in Brazil, the world’s biggest sugar producer, will rise to 603 million tons this season from 532.6 million a year earlier, Canaplan, a research company based in Sao Paulo, said last week. The China Sugar Association said today that the government plans to boost stockpiles with purchase of domestic supplies, reducing prospects for higher imports.
“We still expect sizable producing hedging” as Brazil’s harvest advances, Jeff Dobrydney, a vice president at Jenkins Sugar Group in Wilton, Connecticut, said in a telephone interview. Abundant Chinese inventory “is certainly not bullish,” he said.
Raw sugar for July delivery declined 0.8 percent to settle at 17.74 cents a pound at 2 p.m. on ICE Futures U.S. in New York. On April 18, the price touched 17.43 cents, the lowest for a most-active contract since July 21, 2010. The price has dropped 18 percent in the past 12 months.
“The onset of new crop Brazilian supply amid accommodating weather is the primary source of burden currently,” James Cassidy, the head of the sugar trading desk at Newedge Group in New York, said in a report.
Orange-juice futures for July delivery slumped 2.5 percent to $1.4325 a pound on ICE, the biggest drop since March 20.
Cocoa futures for delivery for July slid 1 percent to $2,310 a metric ton, the first drop in a week.
Arabica-coffee futures for July delivery fell 0.1 percent to $1.431 a pound.
Cotton futures for July delivery gained 0.9 percent to 86.15 cents a pound.