Raw Sugar Extends Longest Slump Since August 2012 on Supply Glut

Sugar Reaches Three-Year Low as Indian Dispute Ends; Cocoa Drops

Sugar fell to a three-year low in London on speculation exports from India will speed up after the end of a cane-price dispute that delayed processing in the world’s second-biggest producer. Cocoa retreated in London. All mills in Uttar Pradesh state will start processing cane by Dec. 12 after ending a shutdown, C.B. Patodia, president of Uttar Pradesh Sugar Mills Association, said in an interview yesterday. India is returning to the export market and may ship out as much as 3 million metric tons of sugar, Abinash Verma, director general of the Indian Sugar Mills Association, said in an interview in London last week.“Whenever India is in position to export, there is always growing speculation on government policy for their support to the millers and farmers, crop projection and exportable price,” Naim Beydoun, a broker at Swiss Sugar Brokers in Rolle, Switzerland, said in a report e-mailed yesterday. “The only fact so far, it was reported that over 600,000 tons of raw-sugar sales have been contracted.”

Refined, or white, sugar for delivery in March slid 0.3 percent to $453.80 a ton by 11:31 a.m. on NYSE Liffe in London after touching $453.50, the lowest for a most-active contract since June 2010. Prices lost 13 percent this year. Raw sugar for the same delivery month fell 0.4 percent to 16.91 cents a pound on ICE Futures U.S. in New York, set for a third annual slump.

‘Long Tail’

Sugar production in Brazil’s center south, the biggest producer’s main growing region, rose 13 percent from a year earlier in November’s first half, industry group Unica said last week. That signals this year’s crop will “have a long tail” and final output will surpass the expected 34 million tons, according to London-based broker Marex Spectron Group.

“There are plenty of bearish factors,” Robin Shaw, an analyst at Marex Spectron, said in a report e-mailed yesterday. “The surplus is a reality, and probably growing as the tail of the center south Brazil crop continues.”

The premium for white-sugar futures to the raw variety declined 41 percent from this year’s high in June to $80.76 a ton, showing that “whites are in surplus and not expected to improve in the near term,” Shaw said. The gap between the two kinds of sweetener probably will be little changed until the end of the year, according to Beydoun.

Cocoa for delivery in March fell 0.2 percent to 1,755 pounds ($2,880) a ton on NYSE Liffe. Cocoa for the same delivery month rose 0.1 percent to $2,816 a ton on ICE on futures trading volumes 60 percent below the average for the past 100 days for the time of day, data compiled by Bloomberg showed.

Bean deliveries this season to ports in leading producer Ivory Coast jumped 45 percent from a year earlier to 516,000 tons as of Dec. 1, according to data on the website of KnowledgeCharts, a unit of Commodities Risk Analysis.

Robusta coffee for delivery in January gained 0.6 percent to $1,668 a ton in London. Arabica coffee for delivery in March was little changed at $1.0985 a pound in New York.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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