Sugar Rises Most in a Week as Rain May Delay Brazil’s Harvest

Sugar futures rose the most in a week on speculation that more rain may delay the harvest in Brazil, the world’s largest producer.

Rio de Janeiro was flooded by record rainfall yesterday, and the government’s Meteorology Institute forecast more showers in the Center South region, which produces 90 percent of Brazil’s sugar. The commodity’s price more than doubled last year as adverse weather reduced output in Brazil and India, the second-biggest producer.

“People are cautious about the incessant rain in Brazil, and more rain could delay crushing,” said Jeff Bauml, a senior vice president at R.J. O’Brien & Associates, a broker in New York.

Raw sugar for May delivery climbed 0.27 cent, or 1.7 percent, to 16.16 cents a pound on ICE Futures U.S. in New York, the biggest gain for a most-active contract since March 30. Yesterday, the price dropped 3.1 percent.

Sugar is “trying to find its equilibrium” after getting “hammered yesterday for no apparent reason,” Bauml said. “It should find a floor at 16 cents.”

The price has tumbled 40 percent this year. On April 1, futures touched 15.46 cents, the lowest level since June 8.

Pakistan increased the quantity of an import tender to 300,000 metric tons from 200,000 tons after canceling an order awarded to Dubai’s Sadan General Trading LLC.

Yi Tian, Debarati Roy
Source: Bloomberg