Buyers of raw sugar from Brazil, the world’s leading producer, are getting a bigger discount for their sweetener as supply concerns fade, according to Brisbane, Australia-based Green Pool Commodity Specialists Pty.
Sugar for immediate loading at the port of Santos, the country’s biggest, was offered for sale last week at a discount of 0.1 cent a pound to the price of the October futures on ICE Futures U.S. in New York, the researcher said in a report e-mailed yesterday. At the port of Paranagua, raw sugar traded at a discount of 0.25 cent a pound. Buyers were getting a discount of 0.05 cent the previous week, Green Pool data showed.
“Brazilian physical values weakened, as supply concerns faded last week,” Tom McNeill, a director at the company, wrote in the report. “A slightly stronger real and potentially some evidence of better ethanol usage in Brazil in June could give support to the market, but it won’t wish away the large surpluses on the table.”
Global sugar supplies will outpace demand by 3.5 million metric tons in the 2013-14 season that starts in October, the International Sugar Organization in London estimates. That follows a record surplus of 10 million tons in 2012-13. Futures prices, down 16 percent this year, gained 1.4 percent last week, with millers directing more of the raw material sugar cane to making ethanol at the expense of the sweetener.
Millers in Brazil’s center south, the main growing region, will make no more than 34.1 million tons of sugar this year, Antonio de Padua Rodrigues, technical director at industry group Unica, said on July 16. That compares with a previous forecast for output at 35.5 million tons. Production will slide as millers make more ethanol, he said.
In Thailand, the world’s second-biggest exporter, raw sugar was last week unchanged at a premium of 1 cent to 1.35 cent a pound to the futures price, according to Green Pool. Sweetener for the Japanese market, or the so-called J-spec, slid to a premium of 1 cent, according to the report. J-spec sugar was at a premium of 1.7 cents a pound a week earlier.
Raw sugar for delivery in October was 0.2 percent higher at 16.43 cents a pound by 7:44 a.m. in New York.
