Sugar Climbs in London as Lower Freight Costs May Spur Demand

By Claudia Carpenter

Sept. 18 (Bloomberg) -- Sugar climbed in London on speculation lower freight costs will help to revive demand.

The Baltic Dry Index, a measure of shipping costs for dry- bulk commodities, dropped 36 percent in the past month. Sugar prices in London rose 3.8 percent over the same period. Egypt's state buyer canceled a sugar tender because of high prices.

``Demand may be better with the lower freight rates,'' said Nick Hungate, a trader at Rabobank International in London.

White, or refined, sugar for December delivery increased $5.70, or 1.5 percent, to $385.10 a metric ton as of 12:02 p.m. on London's Liffe exchange. Prices rose 1.2 percent yesterday.

Egypt's Sugar and Integrated Industries Co. canceled a tender for 50,000 tons of raw sugar because prices offered were too high. ``We will announce another tender when the prices improve,'' said Hussein Ahmed, a Cairo-based senior official at the company.

Raw sugar futures for March delivery gained 1.7 percent to 14.16 cents a pound in New York.

Robusta coffee for November delivery rose $24, or 1.2 percent, to $2,101 a ton and cocoa for December delivery gained 55 pounds, or 3.7 percent, to 1,525 pounds ($2,781) a ton.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net