Raw Sugar Rises to Highest Price This Month as Demand Revives

Sugar rose to the highest price this month in New York on speculation that importing countries will boost purchases.

The International Sugar Organization in London has forecast that demand will exceed output by 8 million metric tons in the 12 months that end in September. Pakistan plans to buy 1.2 million tons by June, and Russia may purchase at least 1 million tons next month. Sugar futures have declined 42 percent since reaching a 29-year high in February.

“These are attractive prices for buyers to come back,” said Bruno Lima, a risk-management consultant at broker FCStone in Campinas, Brazil. “The supply deficit is a reality in the short term.”

Raw sugar for July delivery climbed 0.45 cent, or 2.6 percent, to 17.68 cents a pound on ICE Futures U.S. The contract has rallied 8.3 percent over the past four sessions. Earlier, the most-active futures reached 17.85 cents, the highest level since March 31.

Prices, which more than doubled in 2009 as adverse weather reduced output, have plunged this year on forecasts for bigger crops in Brazil, the world’s leading producer, and India, the second-largest.

Debarati Roy
Source: Bloomberg