Record shipments from Thailand and Mexico add to an already sufficient supply, which exceeds global demand. This causes a reverse in the two-year premium surge of refined sugar. According to estimates compiled by Bloomberg, Brazil, worlds number one exporter, will boost its supply to a record level. Thailand, ranked second, will increase shipments by 11% and Mexico, worlds fifth biggest importer, will export 74% more sugar. Raw-sugar futures have fallen 13% to $374 a ton this year and white sugar dropped 8.5% to $479.40 a ton.
Thaisa Colombo, broker on the sugar and ethanol desk at Sao Paulo-based H. Commcor DTVM, said for Bloomberg: “I don’t see a big chance of gains for the white premium in the short-term. The crop in Brazil is already so big that the supplies from Thailand and Mexico will only add to the surplus.”
After raw sugar prices hit a record level in 2011, sugar premiums surged, which caused a record global production. Oversupply has since then pressured down sugar prices, bringing futures down by 53%. According to estimates by Macquarie Group Ltd., stockpiles in Brazil at the end of this season will be 19% higher at 56,9 million tons and will expand in the next 12 months. Predictions estimate the next shortfall for raw sugar will be in the season ending September 2015, but it will be covered by the increasing inventories.
(Update) Sugar reached a one-week high in New York as the Sao Paolo-based weather forecaster Somar Meteorologia said it expects rains to disrupt the sugar cane harvest in Brazil. Raw sugar for July delivery rose 0,8% to 16,97 cents a pound on ICE Futures U.S. in New York. Refined sugar for August delivery is up 0,8% to $480 a ton on NYSE Liffe in London.
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