By Marianne Stigset
Dec. 2 (Bloomberg) -- White sugar fell for a third day in London on concerns a slowing global economy and a stronger U.S. dollar will erode demand for raw materials.
The Dollar Index, a gauge of the currency against six major counterparts, gained for a third day as investors sought a haven from global economic turmoil. U.S. manufacturing shrank at the steepest rate in 26 years in November, a report showed yesterday.
“Economic news is not encouraging anyone to buy,” Peter Hoyt, a sugar trader at Sucden (U.K.) Ltd., said in a note today. “A strong dollar might have contributed to the pull back.”
White sugar for March delivery fell as much as $2.70, or 0.8 percent, to $319.30 a metric ton, the lowest since Nov. 24, and stood at $320.80 as of 11:44 a.m. on London’s Liffe exchange. Raw sugar for March delivery dropped 0.05 cent, or 0.4 percent, to 11.60 cents a pound on ICE Futures U.S. in New York.
Global sugar output next season is forecast to drop for the first time since 2004-05, led by cuts in India and the European Union, according to the International Sugar Organization. Production will drop 3.8 percent to 162.3 million tons in the year to Sept. 30, 2009, according to the London-based group.
Demand will climb 2.4 percent to 165.9 million tons, leaving a shortfall of 3.6 million tons, it said, adding the deficit may widen to as much as 5 million tons in the 2009-2010 season.
Four of nine traders, analysts and brokers surveyed last week by Bloomberg forecast raw sugar traded in New York would drop. Three predicted it would gain and two expected little change. Three of five surveyed said white sugar traded in London would decline and two expected no change.
Robusta Gains
Robusta coffee for January delivery climbed $15, or 0.8 percent, to $1,980 a ton on Liffe.
Coffee farmers in Vietnam, the world’s second-largest grower after Brazil, have resumed harvesting in the country’s largest growing region after rains cleared, according to traders and local government officials.
“Farmers are trying to take advantage of the current dry weather,” said Hua Thanh Hong, business manager of the Sept. 2nd Import-Export Co. The rains had stopped for two days, according to Huynh Quoc Thich, head of cultivation office in the agricultural department of Dak Lak province.
About two weeks of prolonged rains had interrupted the harvest, delaying the picking of berries and hampering efforts to dry the crop. The difficulties had raised concerns among some traders that they may not be able to fulfill export orders.
Farmers “will need at least one sunny week to dry the picked beans,” Hong said today by telephone. The Dak Lak-based company is among the three biggest Vietnamese coffee exporters.
Cocoa futures for December delivery fell 9 pounds, or 0.6 percent, to 1,575 pounds ($2,331) a ton on Liffe.
-- With additional reporting by Nguyen Dieu Tu Uyen in Hanoi. Editors: Tony Barrett
To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net
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