By M. Shankar
Feb. 27 (Bloomberg) -- White sugar headed for a 10th consecutive weekly advance in London, the longest winning streak in three years, on concern supply is insufficient to meet demand.
India, the world’s second-biggest sugar maker after Brazil, may produce 16 million metric tons in the year ending Sept. 30, 2009, compared with 18 million tons forecast in January, S.L. Jain, director general of the Indian Sugar Mills Association, said in an interview today.
Smaller crops in India, Pakistan and China, along with reforms to the European Union sugar industry, will contribute to a 15.2 million-ton decline in production, broker Czarnikow Group Ltd. said in a report Feb. 25. Consumption is expected to rise 1.5 percent and the global sugar deficit is expected to total 10.4 million tons, the report said.
“We are seeing the magnitude of the deficit for 2008-2009 increasing and the possibility for the deficit to increase still further,” said Peter de Klerk, an analyst with Czarnikow in London. “Czarnikow sees a further potential downside to its forecast for India of 18.5 million tons raw value that translates into 17 million tons for white sugar,” he said.
White sugar for May delivery fell 10 cents to $399.50 a ton on London’s Liffe exchange as of 11 a.m. local time. A close at that price would translate into the longest winning weekly streak since February 2006. The sweetener advanced almost 1 percent last year, outperforming the 31 percent decline in the UBS Bloomberg CMCI Index of 26 raw materials.
Raw sugar for May delivery dropped 0.6 percent to 13.82 cents a pound on ICE Futures U.S. in New York.
Among other agricultural commodities, cocoa advanced 15 pounds, or 0.8 percent, to 1,800 pounds ($2,554) a ton. Stockpiles of the chocolate ingredient climbed 11 percent in two weeks, Liffe data show. Robusta coffee for May delivery gained $18, or 1.2 percent, to $1,554 a ton.
To contact the reporter on this story: M. Shankar in London at mshankar@bloomberg.net in London at
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