Sugar Rises on Speculation Brazil’s Production May Have Peaked

By Claudia Carpenter and Debarati Roy

Sugar rose the most in two weeks on speculation that output may have peaked in Brazil, the world’s largest cane grower.

Production in Center South, Brazil’s main cane-growing region, jumped 26 percent in the first half of May as mills processed a record crop, Unica, an industry association, said last week. Some traders are betting that output will slow because of adverse weather, said Kingsman SA, a commodity researcher.

“We will have to keep a sharp eye out on the Unica crush numbers as we move through the season,” Jonathan Kingsman, a managing director of Lausanne, Switzerland-based Kingsman, said in a report yesterday. “The bulls argue that as the season progresses, the cane will lose both agricultural and industrial yield.”

Raw sugar for July delivery advanced 0.55 cent, or 3.8 percent, to 14.88 cents a pound on ICE Futures U.S. in New York, the biggest gain since May 21.

Ukraine plans to increase its quota for sugar imports by 100,000 metric tons to curb a possible supply gap and restrain domestic prices, industry group Ukrtsukor said, citing Agriculture Minister Mykola Prysyazhnyuk. The year’s quota was set at 267,800 tons, data from the Economy Ministry show.

Refined-sugar futures for August delivery climbed $17.20, or 3.7 percent, to $487.20 a ton on the Liffe exchange in London, gaining for a fourth straight session.

--With assistance from Kateryna Choursina in Kiev. Editors: Patrick McKiernan, Steve Stroth

source: businessweek