London - Sugar climbed in New York on speculation lower prices have spurred demand, leaving limited supplies. Cocoa advanced.
Raw sugar from Brazil, the world’s leading producer, was at a premium of 0.1 cent a pound to the price of the May contract on the ICE Futures US exchange in New York, researcher Green Pool Commodity Specialists Pty. said in a report e-mailed today. That compares with a premium of 0.05 cent a pound last week, data from the Brisbane, Australia-based company showed.
“End users have seemingly sucked up the remains of last year’s sugar stocks at origin and stronger physical premia in Brazil were suggesting nearby tightness despite the overall projected surplus for 2013,” Nick Penney, an analyst at Sucden Financial Ltd. in London, said in a report e-mailed today.
Raw sugar for May delivery rose 0.4 percent to 18.82 cents a pound by 9:10 a.m. on ICE. White sugar for May delivery was little changed at $534.30 a ton on NYSE Liffe in London.
Sugar rose 4.7 percent in New York last week on speculation Brazil would take more measures to support ethanol production at the expense of the sweetener. A 5 percent increase in diesel prices there prompted “hopes that the gasoline price would also be increased,” Kingsman SA said in a report e-mailed today.
A reduction of taxes applied to ethanol is also likely in April, Kingsman said. Ethanol tax may fall to about 30 reais ($15) a cubic meter (35 cubic feet) from 120 reais a cubic meter now, Sao Paulo-based broker J. Safra Corretora said in report dated March 8. A rise in gasoline prices and a reduction in ethanol taxes would increase demand for the biofuel.
White Premium
The premium white sugar commands over the raw variety climbed to $119 a ton, a 27 percent increase this year, data on Bloomberg showed. White sugar for May delivery was $14 a ton more expensive than the futures for August, reversing a discount on February 18. That market structure, in which earlier-dated futures contracts are more expensive than later ones, is known as backwardation and may signal limited supplies.
“Whites are visibly in short supply,” Paul Bannister, head of sugar brokerage at Marex Spectron Group in London, said in a report e-mailed today. “We can only assume that this unexpected shortage of physicals must mean that, for whatever reason, demand has been unexpectedly high.”
Cocoa for May delivery rose 0.1 percent to $2,123 a ton on ICE. Cocoa for May delivery gained 0.4 percent to 1,446 pounds ($2,152) a ton on NYSE Liffe.
Arabica coffee for delivery in May rose 0.2 percent to $1.443 a pound in New York. Robusta coffee for delivery in May was up 0.7 percent to $2,197 a ton in London. - Bloomberg News