Bloomberg; Sugar Rises to 30-Year High in New York as Yasi Heads for Crop
February 02, 2011
Bloomberg
Sugar rose to a 30-year high in New York and gained to a five-week high in London on speculation Cyclone Yasi will damage the crop in Australia, the world’s third-largest exporter.
Sugar industry losses from Yasi may start at A$500 million ($506 million) including crop losses and damage to sheds and machinery, growers group Canegrowers said in a statement today. Sugar prices in New York have jumped 18 % in the past year on crop damage in Brazil, Pakistan and parts of Europe.
“The cyclone is the story de jour at the moment in the sugar market,” said Jason Cole, a broker at SCB. Any more gains will depend on the severity of the damage, he said.
Raw sugar for March delivery rose as much as 0.83 cent, or 2.4 %, to 34.79 cents a pound on ICE Futures U.S. in New York, the highest price for a most-active contract since November 1980, and was at 34.61 cents a pound by 10:57 a.m. London time. White, or refined, sugar for March delivery climbed as much as $15.50, or 1.9 %, to $834.70 a metric ton on NYSE Liffe in London, the highest price since Dec. 29.
Yasi is due to make landfall in Australia’s Queensland state today. It would be the first category five cyclone to hit the state since 1918. Australia is expected to produce 4.8 million tons of sugar in the 2010-11 season, from 4.6 million tons a year earlier, the U.S. Department of Agriculture forecast in November. Brazil and Thailand were the biggest exporters last year and the 2010-11 season starts in July in Australia, according to the USDA. Prices in London rise to a 21-year high in London on speculation floods would prevent a bigger crop in Australia.
Sugar prices rebounded as Egyptian President Hosni Mubarak said he won’t seek a new term, reducing speculation that Middle East turmoil will spread. Nile Sugar Co. planned to resume production at its sugar factory after protests disrupted sugar beet supply to the plant, Naguib Sawaris, Nile Sugar’s owner and chairman, said yesterday. Egypt may tender to buy sugar in the second half of February, Ramadan Suleiman, a purchasing manager at state-owned Sugar and Integrated Industries Co., said on Jan 31.
“The turmoil in Egypt, increased buying from governments and speculation that the cyclone in Australia will hurt the rest of the crop that wasn’t affected by the floods are the three main factors impacting the sugar markets,” said Naim Beydoun, a broker at Swiss Sugar Brokers in Rolle, Switzerland.
Robusta coffee for March delivery climbed as much as $7, or 0.3 %, to $2,238 a metric ton, the highest price since September 2008. Arabica coffee for March delivery was little changed at $2.4975 a pound on ICE.
Cocoa for March delivery rose 17 pounds, or 0.8 %, to 2,177 pounds ($3,530) a ton on NYSE Liffe. Cocoa for March delivery gained $39, or 1.2 %, to $3,352 a ton on ICE.
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