BRAZIL: Sugar market picks up on large delivery
Published: 07/02/2009, 8:35:43 AM
The Brazilian sugar market was boosted by talk that Cargill took delivery of about 1.35 million metric tonnes of sugar this week, according to Dow Jones.
"This record delivery indicates they are bullish about sugar," said one trader. The price, said one trader, was 16.80 cents per pound.
"What is a trading house going to do with that amount of sugar? That is a new record," said Alex Oliveira, a futures trader at Newedge in New York.
Market speculation from two people is that the ultimate destinations for the sugar include India and Russia.
"The domestic (Brazilian) market is going to get more support from the foreign market" for sugar, said Julio Borges at consultancy JOB Economia in Sao Paulo. "The world is buying and betting on Brazilian sugar."
Borges said there is insufficient supply to meet world market demand for sugar.
The weather is now favorable for the 2009/10 sugarcane crop, Borges said. It is normal now for there to be little rain as the crop enters the southern hemisphere winter, he said.
Transactions were limited this week as the market was near delivery for the July contract, said Ricardo Hende, a broker at Union Corretora in Sao Paulo. Premiums are 55 points above the October contract, he said.