June 14 (Bloomberg) -- Sugar fell the most in four days in London after an industry group said production picked up in the second half of May in the main Brazilian producing region. Coffee declined in London.
Sugar output in Brazil’s Center South rose 6.8 percent in the second half of May as farmers accelerated the harvest on dry weather, industry association Unica said yesterday. The region’s sugar production had plunged almost 47 percent from the beginning of the harvest in mid-March to May 16, according to the group. Brazil is the world’s biggest producer.
“The report does indicate progress is being made in the Center South, and that’s driving prices lower today,” said Keith Flury, a London-based analyst at Rabobank International. “Yet, the market still has a number of concerns about output and yield, which may further support the rally.”
White, or refined, sugar for August delivery fell $3.50, or 0.5 percent, to $720 a metric ton by 9:34 a.m. on NYSE Liffe in London. It earlier fell as much as 0.6 percent, the most since June 9. Raw sugar for October delivery was unchanged at 24.38 cents a pound on ICE Futures U.S. in New York.
Dry weather in the last two weeks of May accelerated the harvesting, while it also damaged further development of the crop due to be gathered in the coming months, Unica said. Productivity is also lower because older plantations are being harvested, it said. Unica said it plans to revise its forecast for the 2011-2012 crop after completing a survey of cane available for crushing early next month.
Output increased to 2.38 million tons between May 16 and May 31, from 2.23 million a year earlier, Unica said. Mills in the region turned 46 percent of the cane into sugar, up from 44.7 percent a year ago, with the remainder processed into ethanol, it said.
Brazil’s sugar-cane harvest usually runs from April to December, with peak output between July and September. It was delayed this year because of rains. Unica in March estimated Center South’s harvest at 568.5 million tons and said May 26 lower yields might result in a smaller crop than initially forecast.
Robusta coffee for September delivery fell $5, or 0.2 percent, to $2,466 a ton in London. Arabica coffee for September delivery gained 0.4 percent to $2.717 a pound in New York.
Cocoa for July delivery fell 1 pound to 1,837 pounds ($3,011) a ton in London. Cocoa for September delivery was down 0.2 percent at $2,963 a ton in New York.
--With assistance from Lucia Kassai in Sao Paulo. Editors: John Deane, Nicholas Larkin
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