Buyers of raw sugar from Brazil, the world’s top producer, are getting a bigger discount for their sweetener as harvesting advances and competition with India’s exports increases, according to Swiss Sugar Brokers.
The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.
Ethanol prices in Brazil, the world’s second-biggest producer, need to fall below 60 percent of gasoline costs for motorists to switch to the biofuel, boosting domestic demand, according to consultants Datagro Ltd.
The global sugar surplus will be 5.1 percent bigger than previously forecast as output expands in India, the world’s second-biggest producer, according to the London-based International Sugar Organization.
The global sugar surplus for the 2012-13 season started Oct. 1 will be 38 percent bigger than estimated in November partly because of more supplies from top grower Brazil, the International Sugar Organization said.
Raw-sugar futures jumped to the highest in almost a year after a fire left four injured and six warehouses “totally compromised” at the biggest port in Brazil, the world’s largest producer and exporter.
The global sugar surpluses for this year and the next are narrowing as rising population means accelerating demand in developing nations from China to Indonesia, the world’s largest raw sugar importer.
The global sugar surplus will be 40 percent bigger than previously forecast as rising output in Asia will more than compensate for a decline in Brazil’s main growing region, according to Green Pool Commodity Specialists Pty.
An end to sugar quotas in the European Union, expected by the EU Council as early as 2017, may promote trade of the sweetener within Africa as Ethiopia and Nigeria plan to raise output, said Ecobank Transnational Ltd.