Sugar advances as production slumps in Thailand

Sugar rose in London on slumping production in Thailand, the world’s second-biggest exporter after Brazil, and on bets by some investors that prices are set to rebound. Coffee declined.

Thai sugar output has declined 4.7 per cent from a year earlier to 1.62 million metric tonnes since November 15, according to data from the Office of Cane and Sugar Board. Investors who anticipate higher prices next year may be buying futures, said Keith Flury, a London-based analyst at Rabobank International.

“People are expecting the index funds buying next year, so they’re trying to get ahead of those gains in the market,” he said by phone today. “The index funds will rebalance next year, and sugar looks like it’s going to be a winner.”

White, or refined, sugar for March delivery gained 0.5 per cent to $614.40 a tonne by 10:18 am on NYSE Liffe in London. Prices are down 21 per cent this year. Raw sugar for March delivery rose 0.4 per cent to 23.70 cents a pound on ICE Futures US in New York.

Robusta coffee for March delivery fell 1.7 per cent to $1,800 a tonne on NYSE Liffe in London, extending this year’s retreat to 14 per cent. Arabica coffee for March delivery slid 0.3 per cent to $2.222 a pound on ICE.

Cocoa for March delivery rose 0.6 per cent to 1,416 pounds ($2,219) a tonne in London. The chocolate ingredient has slid 30 per cent this year. Cocoa for March delivery gained 0.1 per cent to $2,219 a tonne in New York.