Sugar climbs to 28-year high in New York
Monday, 10 August 2009
NEW YORK , Aug. 9 (Bloomberg): Sugar climbed to the highest price in more than 28 years in New York on concerns that low monsoon rainfall may stunt cane crops and reduce output in India, the world's largest producer after Brazil.
"Subdued rainfall activity is likely to continue over western, central and peninsular parts of the country" in the next two to three days, the India Meteorological Department said today. Precipitation in India, the world's largest sugar consumer, was 64 per cent below the long-term average in the week ended Aug. 5, the weather bureau said yesterday.
"Concerns over poor supply and strong imports in India have been a major driver of recent price strength, and further fuel for the rally today came from forecasts by the Indian weather office for weak rains in most cane regions," London- based Barclays Capital said in a report.
Sugar futures for October delivery rose 1.01 cents, or 5.1 per cent, to 20.81 cents a pound on ICE Futures US in New York, the highest since April 1, 1981, after touching 20.85 cents earlier, also the highest since that date. The most-active contract climbed 12 per cent this week, the most since September.
Sugar has surged 76 per cent this year in New York on speculation that rising Indian imports, coupled with declining output in China and Mexico, will prolong a global production deficit. Sugar trailed only gasoline and copper in year-to-date returns among futures in the Reuters/Jefferies CRB Index of 19 raw materials.
In China, the world's third-biggest producer, output may trail demand by as much as 1.5 million metric tons next year as acreage used to grow cane decreases, according to Guangxi Bulk Sugar Exchange Center Co.
Mexico set an import quota of 393,000 tons until December to cover a drop in output. A smaller Mexican crop will tighten supplies to the US and boost prices, John Sheptor, Imperial Sugar Co.'s chief executive officer, said on Aug. 5. Imperial is the second-largest US cane processor.
In London, white, or refined, sugar for October delivery rose $18.30, or 3.5 per cent, to $537.20 a metric ton on the Liffe exchange, after touching $539.50 earlier. That's the highest closing price since the contract began trading in July 1983, according to the exchange.
"Subdued rainfall activity is likely to continue over western, central and peninsular parts of the country" in the next two to three days, the India Meteorological Department said today. Precipitation in India, the world's largest sugar consumer, was 64 per cent below the long-term average in the week ended Aug. 5, the weather bureau said yesterday.
"Concerns over poor supply and strong imports in India have been a major driver of recent price strength, and further fuel for the rally today came from forecasts by the Indian weather office for weak rains in most cane regions," London- based Barclays Capital said in a report.
Sugar futures for October delivery rose 1.01 cents, or 5.1 per cent, to 20.81 cents a pound on ICE Futures US in New York, the highest since April 1, 1981, after touching 20.85 cents earlier, also the highest since that date. The most-active contract climbed 12 per cent this week, the most since September.
Sugar has surged 76 per cent this year in New York on speculation that rising Indian imports, coupled with declining output in China and Mexico, will prolong a global production deficit. Sugar trailed only gasoline and copper in year-to-date returns among futures in the Reuters/Jefferies CRB Index of 19 raw materials.
In China, the world's third-biggest producer, output may trail demand by as much as 1.5 million metric tons next year as acreage used to grow cane decreases, according to Guangxi Bulk Sugar Exchange Center Co.
Mexico set an import quota of 393,000 tons until December to cover a drop in output. A smaller Mexican crop will tighten supplies to the US and boost prices, John Sheptor, Imperial Sugar Co.'s chief executive officer, said on Aug. 5. Imperial is the second-largest US cane processor.
In London, white, or refined, sugar for October delivery rose $18.30, or 3.5 per cent, to $537.20 a metric ton on the Liffe exchange, after touching $539.50 earlier. That's the highest closing price since the contract began trading in July 1983, according to the exchange.