Raw Sugar Climbs to 4-Week High on Demand, Frost; Coffee Slips

Sugar climbed to a four-week high in New York on speculation demand may be higher than forecast just as a frost may cut output in southern Brazil, the world’s top grower, and Argentina. Coffee slipped.

Brazilian raw sugar for immediate loading was last week offered for sale at the same price as the October futures on ICE Futures U.S., Brisbane, Australia-based researcher Green Pool Commodity Specialists Pty. said in a report e-mailed yesterday. That’s up from a discount of 0.1 cent a pound in the previous seven-day period. The amount of sugar awaiting loading at Brazil’s main ports rose 30 percent in the week ended July 24, according to shipping agency Williams Servicos Maritimos Ltda.

Frost formed last week in some sugar cane-, corn-, wheat-and coffee-growing regions of Brazil’s states of Parana, Mato Grosso do Sul and Santa Catarina, according to Marco Antonio dos Santos, an agronomist at Sao Paulo-based weather forecaster Somar Meteorologia. Frost was also seen in Tucuman, Argentina’s biggest cane-producing state, said Green Pool. Output in Tucuman is now expected to fall, the researcher said.

“A stronger line-up from center south Brazil, combined with a frost scare across Argentina and southern Brazil, seemed to convince participants that sugar off-take is robust at these lower prices,” said Tom McNeill, a director at Green Pool. “Our major worry is that much of that demand is being driven by China, which is building stocks at a high rate of knots. India recently reshaped raws demand by imposing a small duty change –- will China follow suit?”

Trading Volumes

Raw sugar for delivery in October gained 0.3 percent to 16.97 cents a pound by 8:05 a.m. on ICE in New York. Prices touched 16.98 cents a pound, the highest for a most-active contract since July 1. Futures trading volumes were 24 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg. White sugar for October delivery was 0.5 percent higher at $491.50 a metric ton on NYSE Liffe in London.

Vessels at the ports of Recife, Maceio, Vitoria, Paranagua and Santos, Brazil’s biggest, were waiting to load 1.7 million tons of sugar on July 24, data from Williams Brasil showed. That’s up from 1.33 million tons a week earlier. Ships bound for China were set to take 517,662 tons, more than three times higher than the previous week’s total, the data showed.

Chinese imports are climbing as a government policy to stockpile local sweetener means domestic prices are kept above the international market, prompting more buying, said Czarnikow Group Ltd. and Kingsman SA. Imports of raw sugar into China may exceed 3 million tons this season, up 500,000 tons from an April estimate, said Toby Cohen, a director at London-based Czarnikow.

Arabica coffee for delivery in September slipped 0.2 percent to $1.2085 a pound on ICE. Robusta coffee for delivery in September was 0.7 percent lower at $1,885 a ton on NYSE Liffe.

Cocoa for September delivery gained 0.2 percent to $2,284 a ton in New York. Cocoa for September delivery was up 0.1 percent at 1,545 pounds ($2,366) a ton in London.

Before it's here, it's on the Bloomberg Terminal.