Sugar Drops in N.Y. as Dollar's Gain Cuts Crude, Ethanol Demand

By Ron Day

Oct. 22 (Bloomberg) -- Sugar fell for a third day as the rally in the dollar eroded the value of commodities traded in the currency, adding to speculation that demand will fall for ethanol made from sugar cane.

The dollar gained against the euro on speculation European central banks will cut interest rates as the global economy heads for recession. That boosted the cost of commodities for buyers using the European common currency. Crude oil fell for a second day on weakening fuel demand, and stocks dropped around the world as the deepening economic slump sapped corporate profit.

Raw-sugar futures for March delivery fell 0.2 cent, or 1.8 percent, to 11.04 cents a pound at 8:43 a.m. on ICE Futures U.S. in New York. The most-active contract has dropped 4.7 percent this week and as of yesterday had lost 18 percent this month.

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