White sugar hits three-month low as Brazil promises to up production

White sugar fell to a three-month low in London on forecasts for more supplies from Brazil, the world’s largest producer.

Coffee and cocoa also declined.

Brazil’s cane harvest will expand 5.4% to 602.2 million metric tons for the crop that started Mar 1, its government said last week. The centre south, which usually accounts for 90% of Brazil’s output, will produce 33.1m tons of sugar, almost 5.8% higher than a year earlier, said industry group Unica.

Keith Flury, an analyst at Rabobank International in London, said: “Sugar is likely to continue to be under pressure from improving expectations about the Brazilian production as end users are putting off buying in search of lower prices. Speculators are selling due to the improved outlook.”

White, or refined, sugar for August delivery dropped as much as 1.7% to $600.20 (€459.23m) a ton on NYSE Liffe, the lowest price for a most-active contract since Jan 9. It was down 1.4% at $602.20 a ton at 11:27am in London. Raw sugar futures for July delivery fell as much as 0.7% to 22.65c per pound, the lowest price for a most-active contract since Dec 15. The futures have dropped 2.7% this year.

Money managers reduced their net long, or bets on higher New York sugar prices, by 9.4% in the week ended April 10, according to US Commodity Futures Trading Commission data.