Sugar Rises on Bets Production Deficit Will Widen; Coffee Gains
Sugar futures rose for the second time in three days on speculation that a global production deficit will widen toward the end of 2009. Coffee also gained.
The shortfall may reach 4.5 million metric tons in the year starting in April, up from a March estimate of 2.5 million tons, according to sugar broker and researcher Kingsman SA. The premium for October futures over July has risen 49 percent since March 31, showing there is less demand for immediate supply than for later this year, said Jeff Bauml at broker R.J. O’Brien.
“The perception within the trade is that the fourth quarter is when the deficit will be felt the most,” Bauml, an R.J. O’Brien senior vice president, said by telephone from New York.
Raw-sugar futures for October delivery rose 0.05 cent, or 0.3 percent, to 16.47 cents a pound on ICE Futures U.S. in New York. The price earlier fell as much as 1.1 percent and gained 0.8 percent. The spread between October and the July contract was 1.12 cents a pound, compared with 0.75 cent at the end of March and a record 1.28 cents on June 3.
Brazil, the world’s largest producer, and India, the top consumer, have helped keep sugar futures in a range over the past month, said Jonathan Kingsman, the head of Kingsman SA in Lausanne, Switzerland. October futures have traded between 15.62 cents and 16.91 cents since May 11.
From Bloomberg News.
If you have any questions and comments on Sugar today, use the form below to reply.