Sugar Rises a 3rd Day on Dry India Weather, Brazil Output Drop

By Ron Day

July 31 (Bloomberg) -- Sugar rose for a third straight day in New York, reaching a two-week high as dry weather may damage the cane crop in India and as output declined in Brazil.

Dry conditions are expected in Maharashtra, India's top- producing state. India's cane harvest, the world's second- biggest after Brazil's, is already expected to drop 18 percent next season. Output in Brazil's biggest-producing region dropped 11 percent this year through July 16, as yields slid, according to an industry group.

``Brazil is showing sugar production falling behind last year and the potential for production and exports in India is fading as well,'' said Michael McDougall, a senior vice president for Newedge USA LLC in New York. The weaker dollar is also helping the price, he said.

Sugar futures for October delivery rose 0.24 cent, or 1.8 percent, to 13.64 cents a pound at 8:50 a.m. on ICE Futures U.S., the former New York Board of Trade. Earlier, the price reached 13.71, the highest since July 17.

The price has gained 9.6 percent this week, after declining in the previous two weeks.

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