White sugar premium climbs 9.5%
Published: 07/23/2012, 5:04:40 PM
The premium white sugar commands over the raw variety has climbed 9.5% over the past two weeks as India, the world's second-biggest producer, may curb exports because of rising domestic prices, according to Bloomberg.
White, or refined sugar, was US$121.51 a metric tonne more expensive than the raw sweetener by 13:13 p.m. London time, data on Bloomberg show. That compares with US$110.97 a tonne two weeks earlier. Sugar prices in India climbed to the highest in 18 months because of a delay to the monsoon rains, Green Pool Commodity Specialists Pty Ltd., a researcher based in Brisbane, Australia, said in a weekly report.
"High internal prices in India may divert sugar from exports," Nick Penney, a senior trader at London-based broker Sucden Financial Ltd., said in a report.
India's monsoon, which brings more than 70% of the country's annual rainfall, was 22% lower than a 50-year average since June 1, the weather bureau said July 15. A similar rainfall deficit in 2009 resulted in output there falling by 5 million tonnes, according to Paul Bannister, head of the sugar brokerage at Marex Spectron Group in London.
Wet weather that has delayed the harvest in Brazil's centre south, the main growing region of the world's top producer, has "stymied the production of refined sugar," Sucden's Penney said.
Brazil's white sugar output is set to be smaller in the 2012/13 season as producers will focus on making products that demand less time, such as raw sugar and hydrous ethanol, Luis Roberto Pogetti, chairman of Copersucar SA, owner of mills in Brazil, said last month.
A potential shortage of deliverable refined white sugar is behind the move in the white premium, Penney said.