Futures Market News
Sugar futures rise as top producer cuts down on generation
May 18, 2011 03:10 PM
The globe's top producer of sugar is running low on exports of the soft commodity because of decreased production and delays in shipping, Bloomberg reports.
Consequently, thanks to Brazil's production and shipping issues, Thailand, the globe's second-biggest producer of sugar, is seeing high levels of raw sugar premiums.
"Raw-sugar premiums in Thailand have been rising in recent days as traders continue to face delays in loading cargo out of Center-South Brazil," Peter de Klerk, an analyst at broker C. Czarnikow Futures, told the news service.
At 2 p.m. on Wednesday, sugar futures climbed 4.20 percent, a 0.0092 increase to 0.2285 cents per pound.
Production in the primary sugar generating region of Brazil sank by 69 percent from one year prior when the harvesting season started, according to Unica, an industry association. The decrease is attributable to yields being lower, delays with harvesting and ethanol production taking larger amounts of sugarcane.
"The Thai raw sugar premium for nearby delivery was reported to have traded at 180 points over July New York, the highest in two weeks," according to a Wednesday report by Nick Penney, an analyst at Sucden Financial in London.
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