29/03/10 – White sugar rose for a second day in London after a report that Sudan bought 100,000 metric tons of the sweetener.
The price was $60 million, according to the report by Sudan´s state-run SMC news agency, indicating that the product was white, or refined, sugar costing $600 a ton. White sugar for May delivery on Liffe is $29.10 a ton more expensive than August-delivery sweetener, up from a $19.60 spread at last week´s end.
“There´s buying pressure focused on the May contract in London, which could well be linked to Sudan,” said James Kirkup, director and head of sugar brokerage at Fortis Bank Nederland in London. A 100,000-ton purchase would be a “significant quantity,” he said.
White sugar for May delivery climbed $16, or 3.3 percent, to $502 a ton at 3:47 p.m. local time on the Liffe exchange. The contract posted a sixth straight weekly drop last week. Raw sugar for May delivery jumped 2.1 percent to 17.35 cents a pound on ICE Futures U.S. in New York.
As much as two inches (5 centimeters) of rain fell in growing areas over the weekend in Brazil, the world´s largest sugar producer, raising the potential for harvest delays, according to Dale Mohler, agricultural meteorologist at AccuWeather Inc. in State College, Pennsylvania. Sugar prices more than doubled last year as excess rains curbed output in Brazil.
The rain is “probably getting people a little edgy,” Mohler said. Forecasts call for drier weather to return next month and into May, he said.
Indian Crop Prospects
Traders on March 26 exchanged 118 contracts of May put options on white sugar at $560 a ton, giving them the right to sell the sweetener for 15 percent more than last week´s closing price within six days. It was the first options trading for white sugar since March 18.
The sweetener has tumbled 33 percent this year as forecasts for improved crop prospects in India curbed demand from investors and importers. Hedge funds and other large speculators last week reduced their net long position, or bets on higher New York raw sugar futures, to the lowest since Nov. 24, according to the Commodity Futures Trading Commission.
The net long position on March 23 was 155,463 contracts, down 9.3 percent from a week earlier, according to the CFTC report after trading on March 26.
Prices “may have found a floor as a base for a new rise due to ongoing tight fundamentals for the remainder of the 2009- 10 season,” German research company F.O. Licht said in a twice a month report.
Cuban Raw Output
In Cuba, raw sugar output is about 100,000 tons behind plans to produce 1.3 million tons this season, Licht said. And Pakistan has produced 2.96 million tons of refined sugar this season to March 17, compared with domestic demand of 4.3 million tons, Licht said, citing Industry and Production Minister Mir Hazar Khan Bijarani. | 