Sugar Jumps as Kingsman Downgrades Brazil Crop; Coffee Gains

Sugar jumped in London, trimming the first weekly drop in three, as further downgrades of the crop in Brazil, the biggest producer, added to supply worries. Coffee and cocoa also gained.

Brazil’s sugar cane production in the Center South, the world’s biggest producing region, will be 498 million metric tons in the 2011-12 season, down from 525 million tons estimated in July after last year’s drought and heavy rains this year, Kingsman SA said. The sugar production estimate was reduced to 30.63 million tons by Kingsman.

“The reduction of the Center South Brazil production this year has taken many of us by surprise,” Jonathan Kingsman, managing director of the consulting group, wrote in today’s report.

White, or refined, sugar for October delivery rose $10.40, or 1.3 percent, to $781.60 a ton by 10:37 a.m. on NYSE Liffe in London. Raw sugar for October delivery advanced 0.27 cent, or 0.9 percent, to 29.93 cents a pound on ICE Futures U.S. in New York.

Investment bank Macquarie Group Ltd. lowered their estimates for the Center South crop on Aug. 22. Sugar output in Brazil’s Center South fell 3.4 percent in the first half of August, industry association Unica said yesterday.

Farmers in the Center South have reaped 297.6 million tons of cane in the harvest so far, a drop of 12 percent from the same period a year earlier, Unica said. Mills in the region have produced 17.4 million tons of sugar this year, down 11 percent from last year. The harvest usually runs from March through November.

Robusta for November delivery rose $33, or 1.4 percent, to $2,395 a ton in London. Arabica coffee for December delivery rose 0.365 cents, or 1.3 percent, to $2.7915 a pound in New York, the highest since May 11.

Cocoa for December delivery rose 16 pounds, or 0.8 percent, to 1,926 pounds ($3,145) a ton in London. Cocoa for December delivery was up $32, or 1 percent, at $3,062 a ton in New York.