Kingsman sees sugar rebounding from recent lows
Published: 02/09/2010, 7:34:12 AM
Sugar prices may rebound from a six- week low as a global supply shortage will persist for at least nine months, according to Bloomberg.
"Sugar is being caught in the commodity liquidation," said Jonathan Kingsman, managing director of the Switzerland-based company Kingsman SA, in an interview before a conference in Dubai yesterday. "The fundamentals still look positive. Import demand will be greater than exports." He didn't predict prices.
Futures for March delivery lost 5.3% to 26.17 cents a pound in New York on Feb. 5, the most since Oct. 9, as a rally in the dollar eroded the appeal of commodities and a slump in equities revived concern that the economic recovery may stall. The Reuters/Jefferies CRB Index of 19 raw materials slipped to the lowest level since October.
"A lot of buying is yet to come into the market," said Kingsman. "India, Pakistan and Vietnam need large quantities."
"Buyers have to return to the market as most importers have dried up their pipeline stocks," Paulo Roberto de Souza, chief executive officer of Copersucar SA, Brazil's biggest sugar and ethanol company, said at the conference in Dubai. "Most importers had put off their purchases in the past few months because of high prices. They can't defer buying forever."
Indian importers bought 250,000 tonnes of raw sugar on Feb. 5, Kingsman said, as futures touched 25.7 cents, the lowest level since Dec. 22. Prices declined 12% last week, the biggest weekly decline since October 2008.
"The recent decline provides a good buying opportunity to importers and there has been buying," he said.