Poor-performing sugar prices face further collapse

A jump in sugar production punishable by maintaining its place as the worst performing product, despite a recovery in the price of the sweetener on Thursday in Brazil climate concerns.
Investors are not ready for the "attack rate of supply" of the sugar market faces this year, thanks to the encouragement of production driven by a rise in prices in 30 years last month, a senior analyst Judith Ganes -Chase said.
The return to a more favorable climate alone, with the demise of the disturbing pattern of La Niña later this year could cause a "huge" increase in production.
"But the area planted should increase as well," Ms. Ganes-Chase, director of J Ganes Consulting, adding that "it would not be surprising" if the world sugar production increased by at least 12 million tonnes in 2011-12 , an increase of over 7%.
"Consumption, by contrast, may languish. This will lead to a huge increase in inventories and falling prices."
Bottom of the pile
The warning follows a period when raw sugar prices have already lost over 20% in New York last month high, partly undermined by the adoption of India's other 500 thousand tons of the sweetener for export.
In fact, raw sugar is the worst performer this year among the 53 major agricultural commodities and energy, and metals, a Barclays Capital report showed on Thursday, with oats Chicago in second place to last, and rapeseed Paris next worst performance.
London white sugar lost 8.6% on Monday, ranking it 47. The best performance was Chicago's milk with a jump of 48%, ahead of cotton and gasoline Tokyo.
The ratings came in a report that BarCap expect prices of agricultural products "are likely to remain supported in the first half of the year, but [do] the modest easing in the second half," as food production increases through.
The time factor
Sugar yield was encouraged forecasts on Thursday in two weeks of rain in the South Central region of Brazil - the main sugar producing area of ​​sugar on the top-producing country - in the period prior to the start of the harvest of 2011 - 12, which usually begins next month.
"Since the second half of February, cloudy and rainy conditions have also affected the growth of the cane and this, coupled with drought damage suffered in the final of last season, may have a negative impact on productivity at the start of the harvest season, "Nick Penney Financial Sucden said.
Mills is expected to begin in the second half of April, despite Societe Generale warned earlier this week regarding an insufficient supply of sugarcane, as a result of years of replanting rates low, can lead to processors to maintain at bay the harvesting process when it has a higher sugar content.
Raw sugar for May closed 3.3% higher than 27. 45 cents per pound in New York on Thursday, with white sugar in London in May to add 2.8% to 706.10 dollars per tonne.
Ms. Ganes-Chase acknowledged that the climate of Brazil requires "careful monitoring" by impeding their effect on ship loading and sugar yields harmful.

(Source: http://www.agrimoney.com/news/poor-performing-sugar-prices-face-further-collapse--2970.html)