The two-year surge in the premium that refined sugar commands over the raw sweetener is reversing as Thailand and Mexico add record shipments to supplies that are already greater than global consumption.
Sugar declined for a second day in London on speculation producers in Thailand, the world’s second- biggest shipper, are re-melting more raw sugar into the white variety to meet demand for Ramadan. Coffee retreated.
White, or refined, sugar fell to the lowest level in more than three months in London on speculation of increased sales from the world’s refiners and from Thailand, the second-biggest shipper, to supply Ramadan. Cocoa dropped.
Sugar swung between gains and losses on ICE Futures U.S. in New York as traders weighed forecasts for ample supplies and speculation that the amount of sweetener to be delivered via the exchange will be bigger than expected. Cocoa and coffee were little changed.
Refined sugar’s premium over raw sugar, which climbed to a record last week, may plunge as much as 33 percent by the fourth quarter as Brazil, the biggest exporter, increases production, Newedge USA LLC said.
Sugar rose, capping the first weekly gain in three, on concern that a record backlog at Brazil’s Port of Santos will cut supply from the world’s top producer and exporter. Coffee and orange juice also gained.