Sugar Falls for Sixth Session as Crude Oil Slumps, Dollar Gains

By Ron Day

July 23 (Bloomberg) -- Sugar fell for a sixth straight session, its longest decline in more than two months, as crude oil slipped and the dollar strengthened.

Crude oil dropped as much as $2.60 a barrel, the sixth decline in seven sessions, renewing speculation that demand for fuel made from cane will weaken. Sugar cane is refined into ethanol in Brazil, the world's biggest producer of the sweetener and cane-based fuel. The dollar rose to a four-week high against the yen on supportive statements yesterday by U.S. officials.

Sugar futures for October delivery fell 0.15 cent, or 1.2 percent, to 11.86 cents a pound at 8:58 a.m. on ICE Futures U.S., the former New York Board of Trade. The price earlier touched 11.73 cents, the lowest for a most-active contract since June 13. The slide is the longest since a seven-session slump that ended on May 1.

Speaking in New York yesterday, Treasury Secretary Henry Paulson voiced support for the dollar, which also rose against the euro. Federal Reserve Bank of Philadelphia President Charles Plosser, in remarks in Pennsylvania yesterday, said that interest rates should be raised.

The dollar jumped as much as 0.6 percent against the yen and 0.4 percent against the euro in early New York trading.

To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.