Raw-sugar prices may tumble in the fourth quarter as bigger harvests from India and Brazil, the two largest producers, swell supplies and the global market shifts to a surplus, according to researcher F.O. Licht.
Raw sugar may drop to less than 20 cents a pound by year-end as global supply exceeds demand for a second season in 2012-2013, according to F.O. Licht GmbH, which said that lower prices may spur restocking by importers. The commodity dropped for the first time in nine days in New York.
Sugar production in Europe may fall by 2 million metric tons in the season starting in October from a six-year high in the current year as farmers reduce the planted area in Russia and Ukraine, F.O. Licht GmbH said.
Arabica coffee, this year’s best performing commodity, may climb to the highest in almost three years as dry weather over the next two months threatens to cut production in top grower Brazil, J. Ganes Consulting said.
Sugar rose for a second day in New York and London as Thailand repurchased the sweetener for the first time in more than 30 years, fueling speculation that demand will stay strong as buyers add to stockpiles.
Raw sugar rose in New York after four sessions of declines as higher ethanol prices in Brazil, the leading producer of the sweetener, spurred speculation millers will use more cane to make the biofuel. Cocoa declined.