White Sugar Advances in London on Outlook for Increased Demand

White sugar rose for the first time in three days in London on speculation buyers will seek to add to stockpiles because of expectations for a supply shortfall.

India, the world’s largest consumer, will have to import at least 7 million metric tons this season, with white, or refined, sugar making up about a third of the total, Macquarie Group Ltd. said in a report this month. Indonesia, Pakistan, Egypt and the Philippines are all planning to import as well.

“With all this potential business in the pipeline, it comes as no surprise that white sugar futures in London hit a fresh peak” earlier this month, German research company F.O. Licht said in a report.

White sugar for March delivery climbed $9.10, or 1.3 percent, to close at $732.70 a ton on the Liffe exchange. Prices rose to at least a two-decade high of $748 on Jan. 7. Trading of raw sugar in New York on ICE Futures U.S. is closed today for the Martin Luther King Jr. holiday.

Pakistan, Asia’s third-largest user of sugar, invited bids by Feb. 22 to import 50,000 tons of white sugar as part of a plan to bolster supplies and lower domestic prices, according to a notice on state-owned Trading Corp.’s Web site today.

The company plans to import 500,000 tons of refined sugar by June and the government has asked sugar mill owners to buy another 750,000 tons of the sweetener from overseas, Finance Minister Shaukat Tarin said on Jan. 12.

Indian Monsoon

Excess rains in Brazil and a weak monsoon in India crimped sugar cane output from the world’s two biggest growers and meant prices more than doubled last year. Global demand for sugar will outpace supply by 13.5 million tons in 2009/10, according to broker Czarnikow Group Ltd.

Six of 11 respondents in a Bloomberg survey said white sugar traded in London would gain and four said the price would drop. One forecast little change.

Among other agricultural commodities traded on Liffe, cocoa for March delivery fell 0.7 percent to 2,290 pounds ($3,740) a ton, the biggest drop since Jan. 4. The decline was the first in six sessions.

Robusta coffee for March delivery advanced 0.1 percent to $1,376 a ton, the first gain in three sessions.

Bloomberg