Sugar Rises as Protests in Thailand May Worsen Out

Date 21-May-2010        Source The Economic Tmes        Reporter By M. Shankar and Yi Tian        News Id 155

May 20 (Bloomberg) -- Sugar advanced in London to the highest price in a month and reached a two-week high in New York on speculation that anti-government protests in Thailand may exacerbate a production shortfall. Global output will lag behind demand by 8.5 million metric tons in the year ending in September, according to the International Sugar Organization. Protests spread in Thailand, second only to Brazil as a sugar exporter, after the forced surrender of demonstrators in Bangkok left 15 people dead. The unrest in Thailand “makes traders fear there can be supply disruptions in the short term,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a broker in Chicago. White, or refined, sugar for August delivery rose $2.50, or 0.5 percent, to $489.70 a ton on the Liffe exchange in London, after touching $499, the highest level since April 20. In New York, raw sugar for July delivery climbed 0.06 cent, or 0.4 percent, to 14.99 cents a pound on ICE Futures U.S., after rising to 15.25 cents, the highest price for a most-active contract since May 3. Raw and white sugar more than doubled last year as the dollar slid and excess rain in Brazil and a weak monsoon in India cut output in the world’s two biggest sugar-cane growers. Demand from importing nations including Pakistan and Mexico also supported futures. “There are a few bullish stories circulating,” including violence in Thailand, Thomas Kujawa, a co-head of the soft- commodities department at Sucden Financial Ltd. in London, wrote in a note e-mailed today. The August Liffe contract “is still looking technically stronger with the key resistance at $500,” he said.