Sugar rebounds from 13-month low
Sunday, 9 May 2010
LONDON, May 8 (Bloomberg): Sugar futures rose for the first time in six sessions on renewed demand after falling to the lowest level in almost 13 months.
The gain pared sugar's decline this week to 9 per cent, the biggest drop since mid-March, on expectations for higher global supplies and as the dollar rallied on concern that Greece's debt crisis may spread and undermine an economic recovery. Before rallying today, sugar touched 13 cents, the lowest since April 9, 2009.
"The market is overdue for a rally," said Marcelo Dorea, a partner at Round Earth Capital, a hedge fund in New York that focuses on food and energy. "It would have happened already if not for the financial situation in Europe."
Raw sugar for July delivery gained 0.08 cent, or 0.6 per cent, to 13.75 cents a pound on ICE Futures US in New York. The most-active contract has slumped 49 per cent this year.
White sugar for August delivery slid $4.70, or 1.1 per cent, to $437.80 a metric ton on the Liffe exchange in London. Earlier, the contract touched $421.20, the lowest price since June 22.
"The broader macroeconomic turmoil is taking its toll," Peter de Klerk, an analyst at C. Czarnikow Sugar Futures Ltd. in London, said by telephone.
Sugar production in India, the world's biggest consumer and second-biggest producer, may rise 28 per cent to 22.7 million metric tons next year, National Collateral Management Services Ltd. said yesterday. Output in Brazil's Center South, the world's largest cane-growing region, jumped 77 per cent in April's first half, according to industry association Unica.
"Besides the bearish impact of financial markets, the sugar market is still under the impression of a possible record crop in Brazil and a good outlook for the upcoming crop in India," Eugen Weinberg, the head of commodity research at Commerzbank AG in Frankfurt, wrote in a report e-mailed today.
The gain pared sugar's decline this week to 9 per cent, the biggest drop since mid-March, on expectations for higher global supplies and as the dollar rallied on concern that Greece's debt crisis may spread and undermine an economic recovery. Before rallying today, sugar touched 13 cents, the lowest since April 9, 2009.
"The market is overdue for a rally," said Marcelo Dorea, a partner at Round Earth Capital, a hedge fund in New York that focuses on food and energy. "It would have happened already if not for the financial situation in Europe."
Raw sugar for July delivery gained 0.08 cent, or 0.6 per cent, to 13.75 cents a pound on ICE Futures US in New York. The most-active contract has slumped 49 per cent this year.
White sugar for August delivery slid $4.70, or 1.1 per cent, to $437.80 a metric ton on the Liffe exchange in London. Earlier, the contract touched $421.20, the lowest price since June 22.
"The broader macroeconomic turmoil is taking its toll," Peter de Klerk, an analyst at C. Czarnikow Sugar Futures Ltd. in London, said by telephone.
Sugar production in India, the world's biggest consumer and second-biggest producer, may rise 28 per cent to 22.7 million metric tons next year, National Collateral Management Services Ltd. said yesterday. Output in Brazil's Center South, the world's largest cane-growing region, jumped 77 per cent in April's first half, according to industry association Unica.
"Besides the bearish impact of financial markets, the sugar market is still under the impression of a possible record crop in Brazil and a good outlook for the upcoming crop in India," Eugen Weinberg, the head of commodity research at Commerzbank AG in Frankfurt, wrote in a report e-mailed today.