BRASÍLIA: An early start to the sugar-cane harvest in top producer Brazil is overshadowing forecasts for a global deficit as consumers tap inventories. Brazil’s main growing region will harvest a record crop this year, boosting supplies in a market where demand has started to fall, said Toby Cohen, vice president of market research at American Sugar Refining. Nations across the globe are resolving production shortfalls by drawing down stockpiles, with inventory reductions in the European Union accounting for 35 percent to 40 percent of the world’s total.
Raw-sugar futures traded in New York are heading for a fourth week of declines, the longest losing streak since August, as an early start to the crop in Brazil boosted supplies. Prices started to drop after rallying 11 percent over the past year as top researchers from F.O. Licht to Green Pool and Kingsman, a unit of McGraw Hill Financial Inc.’s Platts, projected global shortages for this season and the next.
“If the price rises, we should expect either some demand to be foregone or we should be expected to get a supply response,” Cohen said Thursday in an interview at the Kingsman EU Seminar in Geneva. “We can already see demand being foregone in first quarter and now we are heading into the second quarter and what’s clear from Brazil is that Brazil is embarking in giving the market a supply response.”
