Global sugar prices rise despite recent predictions of low ceiling

Global sugar prices rose in stock markets yesterday, despite recent industry predictions that the commodity would be kept at a low ceiling until late 2013, at the least, due to a surprisingly strong oversupply from Brazil.

The International Sugar Organisation had raised its oversupply forecast for 2012-13 to 8.53m tonnes, an increase of more than 2.3m tonnes, largely due to the boost in Brazilian output.

“A higher crop in Brazil has boosted the surplus further,” the organisation said, lifting by 2.2m tonnes, to 40.3m tonnes, its estimate for sugar output in the top producing country.

The estimate for world production in 2012-13 was lifted by 2.81m tonnes to a record 180.4m tonnes, in raw sugar terms, well ahead of consumption, for which the forecast was raised by 470,000 tonnes to 171.8m tonnes, the organisation noted.

However, sugar yesterday climbed to the highest level in almost two weeks in New York as investors bought futures after bets on lower prices reached a record just as port strikes in top-grower Brazil threaten to delay shipments. Bloomberg reported coffee also gained yesterday as dock workers in Brazil are considering a strike that would disrupt commodity shipments.

A record 192 vessels were waiting to load 10.8m metric tonnes of soybeans, corn, wheat and rice at the end of last week, compared with 90 ships waiting to load 4.1m tonnes a year earlier, according to SA Commodities in Santos, Brazil.

Raw sugar for May delivery gained 1.3% to US18.38c (c €0.14) a pound. White sugar for May delivery advanced 0.9% to $510 (€385) a tonne on NYSE Liffe in London.