Sugar rises on signs Chinese demand rising, coffee falls

Sugar advanced in London and New York on signs Chinese demand is rising as the harvest in top global producer Brazil winds down and the crop in Thailand may be delayed due to floods. Coffee slid.

Sugar imports into China, the second-largest consumer, will climb 20 per cent in 2011-12 as consumption outpaces production, according to Morgan Stanley. Brazilian industry group Unica said this week that 46 mills had closed for the season by October 15. Floods in Thailand, the second-largest exporter, may delay the harvest by two or three weeks, Thai Sugar Trading Corp, the nation’s biggest shipper, said.

“Demand has been friendly with destination buying helping prices,” said Keith Flury, an analyst at Rabobank International in London. “It is a function of expectations Brazilian supply is likely to taper off while the Thai crush may be delayed,” he said, referring to rising prices.

White, or refined, sugar for December delivery rose $1.10, or 0.2 per cent, to $716 a metric tonne by 10:14am on NYSE Liffe in London. Raw sugar for March delivery rose 0.19 cent, or 0.7 per cent, to 27.05 cents a pound on ICE Futures US in New York. The Standard & Poor’s GSCI index of 24 raw materials fell as much as 0.5 per cent.

About 20 per cent of the all the sugar waiting to be loaded at ports in Brazil will be shipped to China and to Iran, data from Williams Servicos Maritimos Ltda showed.

Vessels heading to China will load 172,750 tonnes, while 111,800 tonnes will head to Iran, data from the shipping agency showed. Ships were waiting at the ports of Recife, Suape, Maceio, Vitoria, Santos and Paranagua yesterday to load 1.39 million tonnes of the sweetener, the data showed.

Robusta coffee for November delivery slid $11, or 0.6 per cent, to $1,892 a tonne in London. Arabica coffee for December delivery was little changed at $2.347 a pound in New York.

“Coffee is still intrinsically weak,” Luis Rangel, vice- president of commodity derivatives at ICAP Futures LLS in Jersey City, New Jersey, wrote in a report e-mailed yesterday.

Cocoa for December delivery fell £6 or 0.4 per cent, to £1,708 ($2,747) a tonne on NYSE Liffe. Cocoa for December delivery slipped $14, or 0.5 per cent, to $2,742 a tonne on ICE.