Sugar Declines as India May Boost Exports; Coffee, Cocoa Advance

Sugar fell for a second day in New York on speculation excess supplies will lead to more exports from India, the second-biggest producer of the sweetener. Coffee and cocoa gained.

India may have a 4 million metric ton sugar surplus in 2011-2012, and “large quantities” could be exported, according to Abinash Verma, director-general of the Indian Sugar Mills Association. The country approved additional exports for 500,000 tons on Aug. 12, allowing mills and traders to sell 24 percent more sugar abroad than previously permitted.

“With India and other regions expecting good crops in the new season, upside now could be tempered by new season fundamentals and the added exports from India,” said Keith Flury, a London-based analyst at Rabobank International. “The additional exports for the fourth quarter and the talk of a larger surplus in the new season could be playing a major role in the market being lower.”

Raw sugar for October delivery dropped 0.32 cent, or 0.1 percent, to 27.75 cents a pound by 7:27 a.m. on ICE Futures U.S. in New York. White, or refined, sugar for October delivery fell $7.20, or 1 percent, to $736.30 a ton on NYSE Liffe in London.

Thailand, the second-biggest exporter, may boost shipments by as much as 5 percent to 7.5 million tons next year as planting increases, the Office of the Cane & Sugar Board said Aug. 12. Brazil is the biggest producer and exporter.

India may boost output to 26 million tons in the 2011-12 season, from 24.2 million tons a year earlier, Verma said. The group is surveying cane acreage through satellite mapping and, if the result confirms their output forecast of 26 million tons, it will submit the finding to the government and ask officials to set an export target by December, Verma said.
Speculator Holdings

Hedge-fund managers and other large speculators decreased their net-long position in New York sugar futures for a second week, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 143,631 contracts on ICE.

Arabica coffee for December delivery advanced 2.55 cent, or 1 percent, to $2.464 a pound in New York. Robusta coffee for November delivery gained $30, or 1.3 percent, to $2,310 a ton in London.

The premium buyers are prepared to pay for coffee in Vietnam widened last week as the harvest neared completion, driving roasters to tap stockpiles in European warehouses, according to three traders. Vietnamese coffee costs $100 to $150 a ton more than prices on NYSE Liffe.

Cocoa for December delivery advanced $10, or 0.3 percent, to $2,917 a ton in New York. Cocoa for December delivery rose 2 pounds, or 0.1 percent, to 1,854 pounds ($3,023.69) a ton in London.