White Sugar Climbs to 6-Week High as Brazil May Slow Shipments

By Claudia Carpenter

Jan. 6 (Bloomberg) -- White sugar climbed to a six-week high in London as gains in the real currency in Brazil, the world’s largest exporter and producer, may discourage shipments.

The real has jumped 8.7 percent since Dec. 29. Exporters may reduce shipments because the strengthening real means they earn less when converting dollar-priced sugar into their local currency. Growers in India and Thailand are also reducing production of the sweetener.

“We keep getting fairly supportive fundamental stories,” said Nick Hungate, a trader at Rabobank International in London. “The Brazilian real is rallying. It looks like Thailand’s crop is down and there’s talk the Indian crop is lower.”

White, or refined, sugar for March delivery rose as much as $6.80, or 2.1 percent, to $334.60 a metric ton, the highest since Nov. 19. It was at $333.10, up $5.30, a ton as of 11:22 a.m. in London on the Liffe exchange. Prices are up 5.2 percent this year.

The Brazilian real was the biggest gainer against the U.S. dollar among 16 currencies yesterday, rising as much as 3.8 percent. It climbed another 1.7 percent today.

Signs of increased production in Brazil contributed to lower sugar prices for the last four months. Output in the biggest growing region in Brazil climbed 52 percent in the second half of November compared with a year earlier, Brazil industry group Unica industry group reported last month.

Thailand produced 312,916 tons of white sugar and 777,045 tons of raw sugar in the Nov. 26 to Dec. 31 period, the Office of the Cane and Sugar Board said on its Web site. The combined output compares with 1.15 million tons last year when the crushing period began Nov. 23.

Indian Crop

India’s crop may be 20 million tons in the year-ended Sept. 30, down from 26.4 million a year ago, Farm Minister Sharad Pawar said last month. The total may be as low as 18 million, Hungate said.

Robusta coffee for March delivery rose $10, or 0.6 percent, to $1,580 a ton. Production in Vietnam, the world’s biggest grower of robusta beans, will be 3.3 percent less than forecast in November after rains slowed the harvest, F.O. Licht said.

Output will be 20.2 million bags, down from a previous estimate of 20.9 million bags, F.O. Licht analyst Stefan Uhlenbrock said in an interview today from Ratzeburg, Germany.

Cocoa for March delivery fell 13 pounds, or 0.7 percent, to 1,789 pounds ($2,618) a ton.

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