Forexpros – Sugar futures were up for a third day on Wednesday, climbing to a three-day high as lingering concerns over sugar crops in Brazil and speculation of increased demand from China buoyed prices.
On the ICE Futures U.S. Exchange, sugar futures for October delivery traded at USD0.2505 a pound during European morning trade, jumping 0.68%.
It earlier rose by as much as 1.4% to trade at USD0.2539 a pound, the highest price since September 23.
Concerns over Brazil’s sugar harvest continued to boost prices after ICAP do Brasil, the nation’s biggest sugar industry group said last Friday that harvests from sugar-cane crops were expected to fall short of a previous estimate, as adverse weather affected crops in recent weeks.
Brazil is the world’s largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.
German lender Commerzbank said in a report Tuesday that it forecast sugar prices to average USD0.2700 a pound in the fourth quarter of 2011, before dropping to USD0.2600 a pound in the following quarter.
The report cited the outlook for sugar production in Brazil and Thailand, the world’s second largest sugar exporter.
Meanwhile, speculation mounted that China will increase imports of sugar in the 2011-12 marketing season due to begin in October, as domestic production trails the pace of rising demand.
Commerzbank expects China to import nearly 2.5 million tons of sugar, the highest level in five years, saying that domestic production “has been disappointing for years now.”
China, the world’s largest sugar consumer, has imported 1.6 million tons of sugar in the first 11 months of 2011, with preliminary data for the full year likely to be issued around October 10.
Elsewhere, on the Chicago Mercantile Exchange, wheat for December delivery dipped 0.13% to trade at USD6.5713 a bushel, corn for December delivery shed 0.53% to trade at USD6.4813 a bushel, while soybeans for November delivery slumped 0.41% to trade at USD12.5788 a bushel.
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