Sugar futures plunged the most in six months in New York and London on signs of increased supply from Brazil, the world’s largest producer and exporter. Coffee fell, while cocoa was little changed.
Brazilian ports were listed as the source of 110,000 metric tons of deliveries against 2,200 October futures contracts that expired today on London’s NYSE Liffe exchange. A month earlier, when August futures expired, deliveries totaled 1,203 contracts, Liffe data show. Raw-sugar prices in New York are down 17 percent since reaching a six-month high on Aug. 24.
“This created an expectation that there is sugar in the market, more specifically in Brazil, helping pull prices down,” Rafael Crestana, a risk manager for broker INTL FCStone in Sao Paulo, said in an e-mailed statement.
Raw sugar for October delivery, the closest to expiration, plunged 1.98 cents, or 6.7 percent, to close at 27.52 cents a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest decline since March 15. The March 2012 contract, the most- actively traded futures, fell 1.87 cents, or 6.6 percent, to 26.31 cents, capping a 4.8 percent decline for the week. Prices are down 18 percent this year.
In London, refined-sugar futures for December delivery slid $30.40, or 4.2 percent, to $687.20 a ton, the biggest decline for a most-active contract since March 15. Prices are down 12 percent this year.
Brazil Harvest
Farmers in Brazil’s Center South, the main growing region in the world, have reaped 338.1 million tons of cane this year, a drop of 11 percent from a year earlier, according to Unica, an industry association. Mills in the region have produced 20.4 million tons of sugar this year, down 9.4 percent from last year.
“Brazil lost sugar-production potential this year due to poor weather, but production in other parts of the world seems strong,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mail. “Traders are watching to see how much more sugar India is willing to export, and how much China might need to buy.” India is the second-largest producer and China is the biggest user.
Alex Oliveira, a trader at Newedge Group in New York, said the decline today reflected slowing demand for sugar after prices surged in June and July, before reaching a high of 31.85 cents on Aug. 24.
Arabica-coffee futures for December delivery slid 0.15 cent, or 0.1 percent, to $2.604 a pound in New York. The price fell 3.6 percent this week.
Cocoa futures for December delivery rose $1 to $2,792 a ton on ICE. The commodity dropped 2.8 percent during the week. On NYSE Liffe, cocoa futures fell and robusta coffee rose.