Raw Sugar Rallies to 18-Month High as Supply Concerns Deepenby
Asia's crop woes keep prices trending higher: Hightower
India's harvest slide to boost demand for Thai, Brazil product
Raw-sugar futures climbed to the highest in more than 18 months as Asian dryness heightens concern that supplies will trail demand, trumping an outlook for bigger output in Brazil, the world’s largest producer and exporter.
Production in India, the second-largest cane-sugar grower, will fall 7.9 percent in the 12 months starting Oct. 1 after drought hurt crops, trimming ending stockpiles for a second year in a row, a unit of the U.S. Department of Agriculture said Tuesday. Prices rose the past three months on projections for a second-global deficit. Citigroup said Wednesday it’s bullish on imports by China as falling profitability discourages production.
“An increasingly tighter Asian supply situation has the market trending higher,” founder David Hightower said in Chicago-based Hightower Report. Given India’s situation, “Brazilian and Thai exports are likely to be in strong demand.”
Raw sugar for July delivery climbed 2.5 percent to settle at 16.65 cents a pound at 1:02 p.m. on ICE Futures U.S. in New York, after reaching 16.79 cents, the highest for a most-active contract since Oct. 20, 2014. In London, white sugar for August delivery rose 1.9 percent to $476.80 a ton on ICE Futures Europe, after touching $479.20, the highest since June 30, 2014.
Data from Brazil industry group Unica showed millers in the country’s main sugar-producing region more than doubled processing in the first half of April, fueling an outlook for record output this season.