Friday, 1 July 2011
Global sugar output increases but prices decline
Since February, the global sugar market’s value has declined significantly, owing to a sharp increase in sugar availability, reports the International Sugar Organisation (ISO) in its ‘Quarterly Market Outlook’, released in May.
The decline in value is attrib- uted to a record harvest in Thai-land, the long-awaited reappearance of India as an exporter and the bulk production from the new season’s crop, in Brazil.
The International Sugar Agreement daily price decreased from a 30-year high of 32.57c/lb, at the start of February, to 20.89c/lb, on May 6.
Meanwhile, white sugar prices have followed a similar trend, with the ISO White Sugar Price Index decreasing from 37.76c/lb, on February 2, to 25.99c/lb, on May 6.
“Similar to raw sugar, white sugar values have lost all the gains made during the 2010/11 price peak,” says the ISO.
However, the organisation’s third revision of the 2010/11 world sugar balance foresees a statisti- cal surplus of about 800 000 t of sugar compared with the 196 000 t expected in February, as a result of the recent crop developments in Thailand, which is expected to produce over 9.5-million tons in the 2010/11 crop cycle.
“Without the significant and unforeseen increase in sugar availability in Thailand, the 2010/11 world balance would have declined by more than one-million tons. The third revision of the world sugar balance also sees world production growing to a record 167-million tons, raw value, which is an increase of 8.9-million tons or 5.67% from the last season,” says the ISO.
World consumption is esti- mated at about 166-million tons, raw value, representing an increase of 3.6-million tons or 2.19% from the previous season.
However, consumption is still expected to grow at a slower rate than the ten-year average of 2.49%. From the start of the season, the ISO has warned that low stocks would support market values despite a modest statistical surplus predicted throughout the season.
No stock rebuilding is foreseen for the current season. After two seasons of large deficits, the stocks:consumption ratio has fallen to its lowest level in more than 20 years. The ratio is expected to decline further to 33.79% in 2010/11 from 34.56% in the deficit season of 2009/10.
However, the new forecast of the trade balance does not indi- cate any further tightness in sugar availability in 2010/11. Indeed, world export availability, which currently stands at about 51.29-million tons, is expected to exceed import demand of 50.42-million tons by 865 000 t, compared with the less than 200 000 t projected in February.
Meanwhile, market attention is increasingly focusing on prospects for the upcoming 2011/12 season. The ISO’s tentative projections indicate that the upcoming crop cycle may bring a significantly higher statistical surplus exceeding three-million tons, putting further pressure on world market prices.
“It is also important to note that stocks are still low and any cur- rently unforeseen weather- induced production shortfall or logistical bottlenecks of key expor- ters, similar to those witnessed in the middle of 2010 in Brazil, may, at least temporarily, result in the return of extreme volatility,” the international body warns.
Brazil Cane Supply
The 2011/12 cane harvest in Brazil’s dominant cane-growing Centre-South region has had a promising start with 200 of the region’s 335 mills already crushing cane at the end of April.
“The decision to bring the harvest forward followed an agreement between the local industry and government after the cost of anhydrous ethanol increased significantly from mid-March. However, there is little hope that cane output will be much higher in 2011/12 than last year,” the ISO explains.
This year, the organisation expects cane supply in the Centre-South to only increase by about 11-million tons to 568-million tons, which is short of the average growth of 50-million tons experienced over the past four years.
Agricultural yields are expected to suffer, owing to a further ageing of the cane, an increase in harvest mechanisation and a lower share of leftover cane.
“Events to watch for in future are investment plans by international trading houses and oil groups, exchange rate movements and production costs, as well as profitability of cane growing in both absolute terms and in comparison to other crops. “Demand drivers are also important, particularly the lower activity in ethanol markets, which could ensure continued increased allocation of cane to sugar,” says the ISO.
This year, growth in global ethanol fuel production and consumption is forecast to decline to less than 4%, reaching around 89-billion litres and 88-billion litres respectively. This is well below the average yearly growth of 21% recorded over the past five years.
Ethanol producers in the US are constrained by the inevitable delays in starting widespread sales of E15 (a blend of petrol and ethanol), while Brazil’s ethanol output is expected to decline as millers continue to focus on domestic and international sugar markets.
“Further, India’s record molasses production and government set price for fuel ethanol are expected to lead to a doubling of its ethanol output. Consumption in the US remains constrained by legislative hurdles, while gains in Brazil are forecast to be modest with possible high prices preventing an increase in hydrous ethanol offtake,” notes the ISO.
A primary source of global consumption growth is the rising inclusion obligations in Europe, as well as significant increases anticipated in smaller sugar consumers, such as Argentina, Australia, Canada, Colombia and India.
Meanwhile, no increase in glo- bal fuel ethanol trade, from the low 2010 level of 2.3-billion litres, is expected and Brazil’s exports are likely to remain relatively weak until international values rise to match returns from sugar.
Alternative Sweeteners Decline
The production of high-fructose corn syrup (HFCS) in the US is expected to decrease slightly by 1% this year, after shrinking by 1.6% last year.
The decline in HFCS consumption, along with rising sugar consumption, is a result of consumers moving away from carbonated soft drinks (traditionally sweetened with HFCS) to alternatives, such as energy drinks, functional waters and juices, compounded by adverse publicity over HFCS consumption and human health, explains the ISO.
Thursday, 30 June 2011
India: Sugar prices sweeten on demand hopes
MUMBAI, JUNE 30:
Spot Sugar prices at Vashi wholesale extended gain by further Rs.30/Rs.40 per quintal on Thursday, taking total rise of Rs.130/Rs.140 in last two days after the announcement of sugar free sale quota for the month of July on Tuesday evening. Traders are of an opinion that announced quota is far lower than expected and has improved the market sentiment positive. In spot prices rose by Rs.30/Rs.40. Naka delivery rates increased by Rs.40/Rs.50 tracking jump of Rs.60/Rs.70 in tender rates as mills held the higher price. Moral was firm said, Vashi market sources.
A spokesman of Bombay Sugar Merchants Association told businessline “With the start of new month tomorrow the retail consumer demand is also expected to rise in the beginning. Fresh buying to fulfill the consumer demand and for inventory building have increased as pipeline is almost empty. Mills are holding the price keeping view of end of the crushing season and coming festival season starts from August. Other main market like Delhi, Karnataka, Gujarat, Utter Pradesh and Rajasthan were showing sharp rise in price. Freight rates were steady at higher level as vehicles are diverted for transportation of exports”.
Sources said, Government has given 15 days extension for June unsold quota of 3 lakh tones and far lower (about 3.90 lakh tones) normal free sale quota of 12.60 lakh tones for July compare to 16.50 lakh tones for June has changed the market move on a positive way / up side. Higher prices at upper mill level will lead spot prices to rise further on support of retail demand. Today being the last day of a June month, there was no selling pressure of mills. Last year for July total 16.65 lakh tones including 14.50 lakh tones normal and 2.15 lakh tones levy sugar quota was given.
In International market sugar prices were 766.70 dollars (previous day 764.80 dollars) for August futures on Wednesday compare to 664 dollar in month beginning. Domestic sugar futures prices also showing firm trend.
On Wednesday 20/22 mills have sold about 70,000 / 75,000 bags (100 kgs each) in the range of Rs.2630 / Rs.2710 (Rs.2610/Rs.2660) for S grade and Rs.2700 / Rs.2800 (Rs.2650/Rs.2750) for M grade. Arrival in the market increased to 58/ 60 truck loads (Each of 100 bags) and local dispatches also higher at 55/56 truck loads.
Bombay Sugar Merchants Association’s rates:
Spot rates: S grade Rs.2741 / Rs.2811 (Rs.2720 / Rs.2762) and M grade Rs.2800 / Rs.2966 (Rs.2776/ Rs.2931).
Naka delivery rates: S grade Rs.2730/ Rs.2760 (Rs.2700 /Rs.2710) and M grade was Rs.2800 / Rs.2900 (Rs.2760 / Rs.2860)
Source: http://www.thehindubusinessline.com/markets/commodities/article2147674.ece
Sunday, 22 May 2011
Sugar Price May Extend Gain Next Week as Brazil Output Slows, Survey Shows
Sugar may rise next week on signs that output is dropping in Brazil, the world’s biggest grower.
Seven of 11 traders, analysts and brokers surveyed by Bloomberg News said that raw sugar traded in New York probably will advance. Two forecast a loss, and two said prices would be little changed. Before today, futures for July delivery gained 1.7 percent this week, closing yesterday at 21.82 cents a pound.
Seven of 11 respondents said refined sugar on London’s NYSE Liffe exchange will advance. Two said prices will fall, and two expected little change. Through yesterday, futures gained 2.6 percent this week to $618.50 a metric ton.
Refined sugar’s premium over raw sweetener probably will widen next week, according to seven of 11 respondents. Three forecast little change, and one said the spread will narrow.
Bullish on raw sugar: 7 Bearish: 2 Neutral: 2
Bullish on refined sugar: 7 Bearish: 2 Neutral: 2
Widening refined premium: 7 Narrow: 1 Neutral: 3
Sugar Exporter Copersucar Files to Sell Shares in Brazil IPO
Copersucar SA, Brazil’s biggest sugar exporter, filed to sell shares in an initial public offering as it speeds up a 1.5 billion-real ($920 million) investment plan.
The company hired Banco Itau BBA SA as the lead coordinator and said Bank of America Merrill Lynch, Credit Suisse Group AG and Goldman Sachs Group Inc. (GS) would also help arrange the sale, according to a statement posted today on the Brazilian securities regulator’s website. The number of shares or value of the transaction wasn’t disclosed.
Copersucar’s 48 shareholders crush about 115 million metric tons of sugar cane to turn it into sugar and ethanol. The company owns a terminal at the Port of Santos, Brazil’s largest, to export the sweetener and the biofuel. This year, Copersucar plans to trade 8.1 million tons of sugar.
Companies have raised $2.71 billion in IPOs in Brazil so far this year, down 29 percent from the $3.81 billion raised in the same period a year earlier, according to data compiled by Bloomberg.
Sugar group profits hit by big wet
AUSTRALIA'S third-largest sugar company has been dealt another blow after a horrific summer of natural disasters, with Maryborough Sugar Factory's cane crush downgraded after a wet February and March.
The worse than expected cane crop, combined with a dip in the sugar price, saw MSF yesterday downgrade its 2011 full-year earnings guidance from normalised EBITDA of between $27 million and $33m to between $18m and $22m.
Chief executive Mike Barry told the company's annual general meeting in Gordonvale, 25km south of Cairns, that the company had already downgraded its crop forecast immediately after Cyclone Yasi hit the region in February.
Mr Barry said that predicted 5 to 10 per cent contraction was expected to be balanced by a high sugar price, so earnings weren't revised.
However, higher than average rainfall during the key growing months following the cyclone resulted in the expected 3.6 million tonne cane crop being reduced to 3.2 million tonnes.
Chairman James Jackson told the AGM that the weather had not been kind to the canegrowers in the South Johnstone region, south of Cairns.
"Since Cyclone Yasi we have experienced wetter conditions and lower sunshine hours than average," Mr Jackson said.
The total crushing capacity of MSF's four sugar mills is 4.7 million tonnes.
MSF, Australia's second-largest sugar exporter, grows 200,000 tonnes of cane, has a 13.3 per cent economic interest in Sugar Terminals Ltd and can produce 550,000 tonnes of raw sugar.
Mr Jackson highlighted the two dominant trends in the Australian sugar industry: local consolidation of milling assets and strong foreign interest in local mills.
MSF recently bought Bundaberg Sugar's north Queensland operations, which included four sugar mills, one of which it later closed.
Further south, Tully Sugar's mill is the subject of a bidding war, with Chinese government-owned Cofco, giant agribusiness Bunge and the foreign-backed local company Mackay Sugar vying for ownership.
Mr Barry said MSF was not looking to buy other mills in the near future, preferring to focus on its existing assets.
The company yesterday entered a new era in its history, with shareholders voting to change its name from The Maryborough Sugar Factory Ltd to MSF Sugar Ltd.
The move away from its original moniker, which it has held since it listed on the stock exchange in 1956, represents the shifting of the company's head office from Maryborough to Cairns.
The acquisition of the Bundaberg mills means much of the company's business is now in north Queensland.
MSF shares fell 6c to $4.
Malaysia: Sugar demand to grow 1.9m tonnes by 2020
"The local sugar demand will be driven by the increase in sales of soft drinks and other sugar products, coupled with the growing population and a positive economic outlook."
KUALA LUMPUR: Malaysia's sugar demand is expected to grow by three per cent a year to over 1.9 million tonnes by 2020 despite the higher prices, said Adam Tomlinson, Rabobank's International Food and Agribusiness Research and Advisory director.
"The local sugar demand will be driven by the increase in sales of soft drinks and other sugar products, coupled with the growing population and a positive economic outlook," he told a briefing on sugar price movements here today.
Malaysians consumed about 1.4 million tonnes of sugar in 2010, and demand has been growing at a compounded annual growth rate of 3.4 per cent over the last ten years, he said.
"Although prices have shifted higher in Malaysia relative to the world's, they have gone up incrementally by 10 to 15 per cent each time," he said.
He said the price increases in Malaysia were tracking regional trends and were not much higher or lower.
Tomlinson said compared with countries in the region, Malaysia was a large consumer of sugar per capita, consuming an average of 50kg, Thailand, 40kg, while Indonesia, India and Philipines, about 20kg.
"Malaysia is a key importer of raw sugar, increasingly relying on Brazil for sugar needs," he said.
Brazil is the largest exporter of raw sugar, accounting for over 50 per cent of global sugar exports.
Tomlinson said global sugar consumption was projected to increase from 160 million metric tonnes in 2009 to 199 million metric tonnes by 2020.
"India and China are expected to be the major growth countries in Asia," he said.
He said urbanisation has encouraged changes in food preferences which had led to an increase in consumption of sweeteners, and this would be the next driver of growth for sugar demand in Asia moving forward.
Dutch-based Rabobank is a food and agriculture global bank offering retail banking, wholesale banking, asset management, leasing and real estate services. -- BERNAMA
(Source: http://www.nst.com.my/nst/articles/Sugardemandtogrow1_9mtonnesby2020/Article/)
Tuesday, 17 May 2011
Sugar Rises on Speculation Surplus May Be Reduced; Cocoa Falls
Sugar rose for a fourth day in New York, the longest streak in more than three months, on speculation plunging output in top producer Brazil may help reduce the world surplus. Cocoa fell.
Output in Brazil’s main producing region fell 69 percent to 795,000 metric tons between the start of the harvest in mid- March and the end of April, industry group Unica said May 12. Global sugar production will exceed demand by 779,000 tons for the 2010-11 season that started in October, the International Sugar Organization estimated the next day.
“The tight spot supply situation in Brazil is acting as a counterweight to the expected onslaught of world sugar supplies in the second half of the year,” Luis Rangel, vice president of commodity derivatives at ICAP Futures LLC in Jersey City, New Jersey, wrote in a report e-mailed today.
Raw sugar for July delivery rose 0.12 cent, or 0.6 percent, to 21.89 cents a pound by 7:56 a.m. on ICE Futures U.S. in New York. That is the fourth consecutive gain for that contract, the longest gain since Feb. 2. White, or refined, sugar for August delivery climbed $6.90, or 1.1 percent, to $613.90 a ton on NYSE Liffe in London.
Demand has increased as buyers seek to rebuild stocks, Heloisa Lee Burnquist, an analyst at Cepea, a University of Sao Paulo research group, said in a note yesterday. “An apparent increase in the demand prevented prices from dropping,” she said.
Rising Production
Sugar production is expected to “increase rapidly as we move through May, which should see increased domestic and export availability,” broker C. Czarnikow Sugar Futures Ltd. said in a report e-mailed on May 13.
Mills have stepped up sugar production as the harvest advances, reducing prices for crystal sugar in the Brazilian domestic market, according to Burnquist. Still, the price of crystal sugar within Brazil remains 18 percent more profitable than exports, she wrote in the note.
Cocoa for July delivery slipped $7 to $2,999 a ton on ICE. Cocoa for July delivery fell 14 pounds, or 0.8 percent, to 1,855 pounds ($3,015) a ton on NYSE Liffe.
Arabica coffee for July delivery was little changed at $2.6395 a pound in New York. Robusta coffee for July delivery dropped $6, or 0.2 percent, to $2,467 a ton in London.
Dry Weather Could Hurt Yields in 20% of U.K. Sugar Beet Crop
About 15 to 20 percent of the U.K.’s sugar beet crop could suffer if it doesn’t rain in the next two to three weeks, according to John Hoyles, a member of the sugar board at the National Farmers Union.
The U.K. had about 61 percent of the normal amount of rain in the last three months, the Department for Environment, Food and Rural Affairs said. Last month was the hottest April in at least 352 years as measured by the Central England Temperature series, according to the Met Office. Soil-moisture deficits were the highest for England and Wales in at least 50 years, the Centre for Ecology and Hydrology said on May 12.
“The main problem of the crop at the moment is just lack of moisture,” Hoyles said by phone. Yields could suffer if it doesn’t rain now, he said, adding that the 15 to 20 percent of the crop planted in lighter, sandier soil is more likely to be affected by the dry weather.
Sugar beet planting in the U.K. was ahead of schedule by at least a week, according to Hoyles. “The majority of the sugar beet looks extraordinarily well, but it’s very thirsty now,” he said, adding that 30-40 millimeters (1.2-1.6 inches) of rainfall were needed.
Yields could still be “very good” if rain falls over the producing regions, he said, adding it’s too early to give crop projections. “We are still in the position that if we got a nice and steady rain now, we could have very good yields this year,” he said.
The sugar beet crop in France, the world’s largest grower of the root, has escaped drought damage so far, Alain Jeanroy, director general of the French sugar-beet growers’ federation, said on May 12.
Saturday, 7 May 2011
Brazil Region’s Sugar Output May Miss Estimate, Unica Says
Sugar output in Center South, Brazil’s main producing region, may miss the estimated 34.6 million metric tons this year, according to the Brazilian Sugarcane Industry Association, known as Unica.
Output may fall short of the forecast released March 31 as sucrose content in the cane is lower than expected and a large percentage of raw material has been used to make ethanol, Technical Director Antonio de Padua Rodrigues said.
“The quality of the raw material is below expectations,” he said by phone today. “That may mean sugar production in April could be 30 to 40 percent below what the market was expecting,” he said, adding that the amount of cane crushed in April was also smaller than anticipated.
The sucrose content of the cane is 105 kilograms (231 pounds) a ton, when it should be about or above 120 kilograms at this time of year, Rodrigues said. Sugar production may also be affected because 65 percent of the cane crushed up to now has been directed to ethanol output, he said.
A shortage of ethanol in the South American country led prices for the biofuel to spike earlier this year, Patricia Luis-Manso, an analyst at Lausanne, Switzerland-based researcher and broker Kingsman SA, said in March.
The amount of cane used for ethanol production may fall to 44.84 percent, down from the 45.34 percent estimated in March, Rodrigues said.
Sugar ends quiet on some support
Sugar prices ended flat in the wholesale sugar market today on scattered buying against adequate supply and settled at last levels.
Market analysts said sufficient stocks positions to meet the ongoing seasonal demand mainly kept the sweetener prices unaltered.
Following were today's quotation in Rs per quintal.
Sugar ready M-30 2,950-3,050 and S-30 2,925-3,040
Mill delivery M-30 2,750-2,925 and S-30 2,725-2,900
Sugar mill gate prices (excluding duty): Kinonni 2,910, Asmoli 2,900, Mawana 2,860, Titabi 2,850, Thanabhavan 2,760, Budhana 2750 and Dorala 2,850
(Source: http://www.business-standard.com/india/news/sugar-ends-quietsome-support-/134345/on)
Thursday, 5 May 2011
Sugar Prices May Fall on Thailand Export Gain, Survey Shows
Sugar may fall as exports rise in Thailand, the world’s second-largest producer.
Six of 11 traders, analysts and brokers surveyed by Bloomberg News said that raw sugar traded in New York will fall. Four said it will rise, while one forecast little change. Before today, futures for July delivery dropped 6.2 percent this week to 20.86 cents a pound.
Six of 11 respondents said refined sugar on London’s NYSE Liffe exchange will drop, four said it will gain, and one expected little change. Through yesterday, the price lost 5.3 percent this week to $582.30 a metric ton.
Refined sugar’s premium over raw sweetener may narrow next week, according to five of 11 respondents. Four forecast the spread would widen, while two expected little change.
Bullish on raw sugar: 4 Bearish: 6 Neutral: 1
Bullish on refined sugar: 4 Bearish: 6 Neutral: 1
Widening refined premium: 4 Narrow: 5 Neutral: 2
French Sugar Beets Developing Faster Than Average on Warm April
France’s sugar-beet crop, the world’s biggest, is developing at a faster-than-average pace after warm April temperatures boosted growth, crop researcher Institut Technique de la Betterave said.
Plant development is about 10 days ahead of the five-year average, allowing for a potential yield gain of 10 percent, the Paris-based ITB said on its website. The sugar-beet crop so far has suffered “little” from a lack of rain, the researcher said.
France had its second-hottest April since 1900 and one of the driest since 1953, the Agriculture Ministry said in an online report. Temperatures across France averaged 14.5 degrees Celsius (58 Fahrenheit) last month, 3.8 degrees above normal.
“Being well established, the sugar beets have suffered only a little from the lack of water and have benefited from the elevated temperatures,” the institute said. “The high April temperatures have accelerated the development of the beets.”
On average, France’s beet-growing regions received 14.5 millimeters (0.57 inch) of rain in April, bringing the precipitation deficit since the start of the year to 96 millimeters, ITB said.
France is the world’s largest sugar-beet producer, ahead of Russia and the U.S., according to theUnited Nations’ Food and Agriculture Organization. The European country produced 31.7 million metric tons of sugar beets last year, according to Eurostat data.
Sugar Surplus May Exceed 1 Million Tons in 2010-11, ISO Says
Sugar production may exceed demand by 1 million metric tons in the 2010-11 season ending in September on higher output in Thailand and India, the International Sugar Organization said.
The ISO had estimated the surplus at 200,000 tons in February. Thai output reached 9.6 million tons at the beginning of May, up from 7.2 million tons a year earlier, it said in an e-mailed report today. The country is the world’s second-largest sugar exporter, and India ranks second among producers.
“An expected annual output of about 9.65 million tons, raw value, represents a significant improvement over Thailand’s previous production record of 8.06 million tons, raw value, achieved in 2007-08,” it said.
Output in India climbed 24 percent to 22.6 million tons in the first seven months of the 2010-11 season, the London-based ISO said in the report. Brazil is the largest sugar producer and exporter.
Raw sweetener has plunged 35 percent in New York trading this year and white, or refined, sugar has dropped 25 percent in London. “Global fundamentals have shifted from a perceived deficit to a short-term surplus due to a larger-than-expected Thai harvest,” Keith Flury, an analyst at Rabobank International in London, said in a report today.
Hedge funds cut their bullish bets on sugar futures to the lowest in more than two years as supplies surged in Thailand, data from the U.S. Commodity Futures Trading Commission showed on April 29.
“The reported reduction in net long positions may be treated as evidence of fading investors’ interest in sugar futures on the back of expectations for further price easing,” the ISO said.
Sugar price correction 'could be close to ending'
The sugar price correction may be close to running its course, Rabobank analysts said, even as futures in the sweetener set a fresh eight-month low amid a broad commodities liquidation.
New York's near-term futures contract, for July delivery, at one point hit 20.50 cents a pound on Thursday, down 40% from a 30-year high hit in February as the sell-off in raw materials continued.
However, while prices could fall below 20 cents a pound, such a fall would not be "sustainable", Rabobank analysts said, ruling out a drop to the levels of 13 cents a pound reached a year ago.
"Despite the current downward inertia, further price corrections could be tempered."
'Compelling case to buy'
One reason for hope was the dearth of speculators with long positions in the crop, meaning pressure from liquidation on that front was limited.
The net long position in New York sugar futures held by managed funds, a proxy for speculators, has fallen by 37% in five weeks to the lowest since March 2008, regulatory data show.
While speculators may continue to sell, they may come up against increasing buying pressure from investors viewing lower prices as a "buying opportunity".
"As many investors want to take advantage of emerging market demand in commodities and use commodities to hedge against inflation and currency fluctuations, there could be a compelling case to buy sugar," Rabobank said.
Incentive for an incentive
A second was the shape of the futures curve which, in pricing March 2012 futures well above those of October next year, was suggesting that "the market may be more concerned about supply next year", in providing an incentive for buyers to delay purchases.
The relative pricing "suggests that while supply is currently abundant, worries persist about the fundamental balance sheet", the bank said.
Indeed, high prices were needed to encourage sugar output in 2012-13 to underpin supplies.
"It is important that prices do not fall below levels that would discourage sugar production, whether that means the planting of sunflower instead of beet in Europe, cavassa instead of cane in Thailand, or production of ethanol instead of sugar in Brazil," Rabobank said.
"In our view, the low end‐price level that will ensure adequate inventive for suppliers in the new year is near the 20 cents a pound level."
'End of a bull run'
The decline in sugar prices has been attributed to improved hopes for supplies, with Thailand, the world's second-ranked sugar exporter, expected to achieve record output of 9.0m tonnes in 2010-11.
Indonesia is forecasting a 16% rise to 2.6m tonnes in sugar output, while top exporter Brazil is gearing up for peak production.
ABN Amro said that the sugar market "has the feeling of coming to the end of a bullish period".
New York's July contract stood at 21.00 cents in late deals, down 1.6% on the day. London white sugar for August closed down 1.7% at $582.30 a tonne.
(Source: http://www.agrimoney.com/news/sugar-price-correction-could-be-close-to-ending--3112.html)
Wednesday, 4 May 2011
Commodity sell-off deflates sugar, coffee and cocoa
* Egypt's SIIC cancels tender for 200,000 tonnes raw sugar
* Arabicas sink, sugar stumbles and cocoa weakens
* Ivorian cocoa exports expected to pick up (Adds details and recasts, changes dateline)
By Rene Pastor and Sarah McFarlane
NEW YORK/LONDON, May 4 (Reuters) - Arabica coffee futures tumbled from 34-year highs on Wednesday as the softs complex reeled in a commodity-wide sell-off due to poor U.S. data and worries global economic growth could stall this year.
Sugar lost ground because of ample supplies, while cocoa slid due to easing tensions in top grower Ivory Coast and prospects for a pick-up in cocoa exports later this week.
The Reuters-Jefferies CRB index, a global benchmark for commodities, fell almost 1 percent for a second day in a row, hit by a sell-off in oil and most raw materials.
The July arabica coffee contract on ICE Futures U.S. dropped 11.45 cents or 3.7 percent to trade at $2.947 per lb as of 12:30 p.m. EDT (1630 GMT), having hit a session low of $2.912.
London's July robusta coffee dipped $35 to trade at $2,576 per tonne, after hitting a new contract peak of $2,624 during Wednesday's session.
"Everyone's running for the door at the same time," said James Cordier of brokers optionsellers.com in Florida.
He said arabicas may have peaked when they came within a whisker of $3.09 as the commodity complex showed signs of having burst its bubble.
Fundamentally, the market has surged on speculative buying and concern about tight supplies of high-quality beans.
Sugar futures fell, weighed by expectations of ample supplies from Brazil and Thailand, the possibility that India could authorize more unrestricted exports, and a canceledEgyptian tender.
Egypt's state-owned Sugar and Integrated Industries Co (SIIC) has canceled a tender to buy 200,000 tonnes of raw sugar and is expected to hold another tender soon, European trade sources said.
The July raw sugar contract declined 0.54 cent to 21.51 cents per lb, while London's August white sugar futures fell $16.50 to trade at $593 per tonne.
Some traders said ICE front-month July raw sugar futures could soon test psychological support at 20 cents.
"The prospects for the bulls are still seemingly worrying as it seems their best chance of a rebound will be either weather in Brazil taking a turn for the worse or some unforeseen political event," said Thomas Kujawa of Sucden Financial.
Alex Oliveira, senior sugar analyst at brokers Newedge USA, said: "Unless there is bullish news coming out of Brazil, it's hard to see it (raw sugar) going back to 25 cents."
Cocoa futures also declined, with traders looking at the restart of exports from Ivory Coast.
"London is undervalued compared to New York ... it means that your West African beans, which are better quality than Indonesian beans, are cheaper," said Eric Sivry, head of the agri options brokerage at Marex Financial.
New York's July cocoa contract dropped $60 to end at $3,211 per tonne. London's July cocoa futures lost 39 pounds to finish at 1,945 pounds per tonne.
