Bloomberg News

Jefferies Bache Takes Delivery of 152,763 Tons of Sugar

March 01, 2013

Jefferies Bache LLC took delivery of about 152,763 metric tons of sugar in transactions involving New York futures contracts, amid shipping bottlenecks in Brazil, the world’s largest producer and exporter.

Jefferies took delivery on 3,007 expiring March contracts on ICE Futures U.S., data on the exchange’s website showed today. That compares with 17,325 contracts delivered against the March contract last year, ICE data show. The delivery was the smallest for the March contract since 2006, according to Kingsman SA, a Swiss research company.

A record backlog for grain shipments at Brazil’s Port of Santos last month is also delaying sugar exports from the country. As of yesterday, 1.35 million tons of sugar was at Brazil’s main ports compared with 270,600 tons a year earlier, according to data from SA Commodities in Santos, Brazil, compiled by Bloomberg.

“The delivery was the smallest in seven years and basically is due to the absence of Brazilian sugar,” Michael McDougall, a senior vice president for Newedge Group in New York, said in an e-mail. “We believe this has to do with brisk demand for Brazilian sugar in late 2012 and early 2013 and concern over the logistic bottleneck being caused by record corn and soy crop exports.”

Firms including ADM Investor Services, J.P. Morgan Securities LLC, Jefferies Bache, Term Commodities, and UBS Securities LLC will deliver the sweetener, ICE data show. The supplies were at ports in El Salvador, Honduras, Costa Rica and in Brazil, the exchange said.

Raw-sugar futures for May delivery dropped 2.2 percent to 17.99 cents a pound at 11:29 a.m. on ICE in New York, heading for the biggest loss since Feb. 14. Prices slid 2.1 percent last month, the second straight decline.

The contract for March delivery expired yesterday, and today is the so-called first notice day, when traders must indicate whether they intend to accept physical supplies.

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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