Sugar rebounded in New York on speculation prices, which declined as much as 2.4 percent yesterday, fell too far as the sweetener is now approaching the cost of production. Coffee fell. Raw sugar futures traded on ICE Futures U.S. in New York have fallen 8.3 percent this year as supplies are set to outpace demand by 11.5 million metric tons in the 12 months started Oct. 1, estimates Lausanne, Switzerland-based researcher Kingsman SA, owned by McGraw-Hill Cos. The commodity is this year’s worst performer in the Standard & Poor’s index of 24 raw materials. Sugar may need to fall further to spur millers in top producer Brazil to make ethanol at the expense of the sweetener, Macquarie Group Ltd. said in a report e-mailed yesterday. “Sugar prices are near the marginal cost of production, which will provide good price support,� Abah Ofon, an analyst at Standard Chartered Plc in Singapore, said in a report e- mailed today. “Although the market continues to be weighed down by a surplus, supply risks remain.� Raw sugar for delivery in May gained 0.7 percent to 17.89 cents a pound on ICE by 5:22 a.m. New York-time. Yesterday, the price touched 17.76 cents, the lowest for a most-active contract since August 2010. White, or refined, sugar for delivery in May gained 0.3 percent to $491.80 a ton on NYSE Liffe in London. A logistics competition between sugar, grains and oilseeds in Brazil as the country harvests “large� crops may support the sweetener’s price, Keith Flury, an analyst at Rabobank International in London, said in a report e-mailed yesterday. Brazil’s center south region, the country’s largest growing area, will harvest a record 580 million tons of sugar cane in the 2013-14 season that starts there in April, the bank said. Transport Costs “With some of the country’s mills potentially seeing transport costs to the ports rise to 2 cents a pound, the New York price needs to reflect this in order for exports to be realized,� Flury said in a report. Sugar for March delivery is at a premium of 0.24 cents a pound to the sweetener for May, reversing a discount in the first trading session this week. That market structure, in which earlier-dated contracts are more expensive than later ones, is known as backwardation and may signal limited supplies. Cocoa for delivery in May was down 0.3 percent at $2,149 a ton in New York. Cocoa for delivery in March was unchanged at 1,418 pounds ($2,196) in London. “Ample supply from Ivory Coast has capped prices, although improved chocolate consumption will buoy demand,� Ofon said. Arabica coffee for May delivery was 0.1 percent lower at $1.4055 a pound on ICE. Robusta coffee for delivery in May fell 0.3 percent to $2,052 a ton on NYSE Liffe. To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.

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