Raw Sugar Tumbles 5.3% as Commodities Drop on SEC-Goldman Case

Sugar tumbled more than 5 percent, leading commodities lower, after the U.S. filed a fraud suit against Goldman Sachs Group Inc., one of Wall Street’s biggest traders and brokers of raw materials.

The Reuters/Jefferies CRB index of 19 agricultural, energy and metal prices headed for the biggest drop in seven weeks. The Securities and Exchange Commission accused Goldman of defrauding investors in financial products tied to subprime mortgages. U.S. equities also slumped the most since February.

“The sell-off is because of Goldman,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. “This news may keep commodities depressed for the next few days.”

Raw sugar for July delivery declined 0.9 cent, or 5.3 percent, to 16.18 cents a pound on ICE Futures U.S., the biggest drop since March 31. The price declined 3.5 percent this week.

Sugar has plunged 47 percent since reaching a 29-year high of 30.4 cents on Feb. 1 amid forecasts for bigger crops in Brazil, the world’s leading producer, and India, the second- largest.

Refined sugar for August delivery declined $10.30, or 2.1 percent, to $486.30 a metric ton on the Liffe exchange in London.

In New York, arabica coffee for July delivery dropped 2.6 cents, or 1.9 percent, to $1.308 a pound, the biggest decline since April 8. The contract fell 2.8 percent this week.

Debarati Roy
Source: Bloomberg