By Marvin G Perez and Manisha Jha (Bloomberg) White-sugar spreads climbed to a record high as a shipping container shortage increased demand for supplies delivered through the exchange.
The March contract’s premium over May futures rose to $23.50 a ton, the highest since the spread began in 2019. The March over May premium also jumped for raw sweetener in New York. Shipping rates have risen due to a shortage of containers and demand to stockpile commodities amid the Covid-19 pandemic.
The container shortage “is resulting in a higher demand for the white contract structure,” because the exchange uses a delivery method called break-bulk, which is cheaper, said Carlos Mera, an analyst at Rabobank International in London.
Exports from India, the second-ranked producer, have slowed as a result of the container shortage. Prices are also drawing support from fund buying and concerns about tighter supplies in Thailand and the European Union, as well as firm import demand from Pakistan.
Brazil coffee areas in Minas Gerais and parts of Sao Paulo Espirito Santo got only 30% to 60% of average precipitation in January, as did many sugar-cane areas in the nation’s top center-south region, Donald Keeney, senior meteorologist for Maxar in Gaithersburg, Maryland, said by phone. While ample rain this week brought relief, the conditions last month exacerbated stress to the regions after below normal rain last year, he said. The La Nina event could still bring erratic rain through May.
May white-sugar futures gained 1.7% to settle at $443.40 a ton in London. The March contract, which expires on Feb. 12, landed at $464.70. Raw sugar also advanced in New York. Arabica futures gained as much as 3.5%, the most since Jan. 13.
Copyright 2021 Bloomberg
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Iraq will raise shipments of a key crude grade next month, part of an enlarged export program indicating that the OPEC+ nation is boosting its oil production.
The European Union on Friday agreed an 18th package of sanctions against Russia over its war in Ukraine, including measures aimed at dealing further blows to the Russian oil and energy industry.
It was a relatively flat week for pricing on the major deepsea box shipping trades, with a scheduled mid-week general rate increase (GRI) failing to lift container spot rates on the headhaul eastbound transpacific route.
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