|
30/03/10 – White sugar rose for a third day in London on speculation users will have to compete for limited supplies before the new crop in Brazil, the world´s largest producer.
The May futures contract that ends trading on April 15 is $30.90 a metric ton more expensive than the August contract, indicating reduced supplies or more demand. The global supply surplus of 190,000 tons in the second quarter won´t make up for a shortfall of 8.8 million tons in the past six months, according to Fortis Bank Nederland and researcher VM Group.
“Demand may emerge because some buyers can no longer wait,” said Tobin Gorey, commodities strategist at JPMorgan Chase & Co. in London. “That will support, perhaps boost, prices for the May contract.”
White, or refined, sugar for May delivery increased $16, or 3.2 percent, to close at $519 a ton on the Liffe exchange. Prices have climbed 7.5 percent since March 25. The August contract closed at $488.10.
The May, August and October contracts closed above their 10-day moving averages. “This will be viewed as positive and further gains could look likely,” Sucden Financial Ltd.´s David Sadler, head of the sugar desk in London, wrote in a report published in the morning.
Iraq, Sudan
Iraq “coming back into the market” for sugar and purchases by Sudan may have contributed to the increased spread between the May and August contracts, Sadler wrote.
Raw sugar futures for May delivery climbed 1 percent to 17.69 cents a pound on ICE Futures U.S. in New York at 5:49 p.m. London time.
Prices of refined sugar have dropped 31 percent this year as crop prospects improved in India, the world´s second-biggest producer and largest consumer, leading buyers to hold back. Brazil´s sugar production in the season starting next month will be 38 million tons, up 5 million tons from last season, JPMorgan´s Gorey wrote in a report yesterday.
“There might be a lot of sugar coming to market later in the year, but how much there´ll be around for the May delivery is another question,” Gorey wrote. “The May expiry still has the potential to be messy.”
About 25 days are needed to ship Brazilian raw sugar to Dubai, site of the world´s largest refinery, for processing, said Sergey Gudoshnikov, an economist at the International Sugar Organization in London. |
