Sugar Prices Fall After Rally Before Record Delivery

http://www.bloomberg.com/news/2013-10-01/sugar-falls-after-rally-before-record-delivery-coffee-advances.html

October 02, 2013 at 9:06 AM

Sugar fell in New York, paring the biggest gain in almost three weeks, on speculation of a record delivery against expiring October futures. Coffee climbed.

Sugar amounting to about 1.5 million metric tons, an all-time high, will be delivered to settle the expiration on ICE Futures U.S., James Cassidy, head of sugar trading at Newedge Group in New York, said yesterday, mostly coming from leading producer Brazil. Raw sugar for delivery in March rose as much as 2.4 percent yesterday, the most since July. The October futures settled 3.6 percent higher at 17.48 cents a pound.

“The market found support yesterday at the March mid-Bollinger Band and recovered well, but physical demand has not been keeping pace, as evidenced by a large and weak October expiry,” James Kirkup, a London-based broker at ABN Amro Markets U.K. Ltd., said by e-mail today. “The market is obviously digesting the news on the delivery.”

Raw sugar for delivery in March slid 0.2 percent to 18.11 cents a pound by 6:43 a.m. on ICE in New York after gaining the most since 2010 in the third quarter. Refined, or white, sugar for delivery in December slid 0.3 percent to $484.70 a ton on NYSE Liffe in London.

Prices fell 7.2 percent this year in New York and are set for a third annual drop, the longest losing streak since 1992. Supplies outpaced demand by a record 10 million tons in the 2012-13 season ended yesterday and another surplus is forecast for the year starting today, according to the International Sugar Organization. The excess will be 4.66 million tons in 2013-14, says Green Pool Commodity Specialists Pty.

“It’s a natural correction from the hike we’ve seen,” Jonathan Bouchet, a trader at Boman Capital SA in Geneva, said by e-mail. “The surplus is substantial enough that any important rise like yesterday’s will give the opportunity for bears to sell more.”

Arabica coffee for delivery in December rose 0.4 percent to $1.141 a pound in New York. Robusta coffee for delivery in November added 0.4 percent to $1,648 a ton in London.

Cocoa for delivery in December slid 0.5 percent to $2,626 a ton on ICE. Cocoa for the same delivery month fell 0.9 percent to 1,691 pounds ($2,745) a ton on NYSE Liffe.

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