Bloomberg News

Sugar, Coffee Fall as Producers May Increase Sales After Rally

February 21, 2013

Sugar and coffee fell in London and New York as producers may boost sales after yesterday’s price rally just as a stronger dollar reduces the appeal of raw materials. Cocoa rose in London and declined in New York.

Sugar climbed as much as 1.5 percent on ICE Futures U.S. yesterday, while coffee gained as much as 2.9 percent. Investors sought to buy futures after U.S. Commodity Futures Trading Commission data compiled by Bloomberg showed bets on lower coffee and sugar prices reached a record in the week ended Feb. 12. The U.S. currency rose to the highest level in more than five months against a basket of six currencies, reducing the appeal of dollar-denominated commodities.

“The big day in coffee and sugar yesterday has prompted some producer selling, with Brazil, Thailand, and others having sugar to sell, and Brazil and others having coffee to sell,” Keith Flury, an analyst at Rabobank International in London, said by e-mail today. “The higher dollar and general red across the board also means some investor profit-taking.”

White, or refined sugar, for May delivery fell 0.7 percent to $497.60 a metric ton by 10:45 a.m. on NYSE Liffe in London, after gaining as much as 1.3 percent yesterday. Robusta coffee for delivery in May fell 0.8 percent to $2,046 a ton. It gained as much as 1.4 percent yesterday.

In New York, raw sugar for delivery in May declined 1.2 percent to 17.92 cents a pound on ICE, while arabica coffee for May delivery was down 1.4 percent to $1.397 a pound.

Brazilian Millers

Sugar millers in Brazil, the world’s top producer, have sold less than 50 percent of their 2013-14 crop that starts in April in the futures market, a slower pace than the usual, Flury said. Producers in Thailand, the second-biggest sugar exporter, have also sold less than usual, he said. The Southeast Asian nation is harvesting the 2012-13 crop that started in November.

Coffee stockpiles in top grower Brazil were about 20 percent higher than a year earlier, according to Terra Forte Exportacao e Importacao de Cafe Ltda. Inventories stood at 28.4 million bags as of Jan. 1, up from 23.75 million bags in the same period a year earlier, said Jayme Leme Neto, an export manager at the Sao Joao da Boa Vista-based company. A bag of coffee weighs 60 kilograms (132 pounds).

Cocoa for delivery in March was 0.2 percent higher at 1,407 pounds ($2,140) a ton in London. Cocoa for delivery in May was 0.2 percent down to $2,108 a ton in New York.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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