Sugar rose for a second day in New York and London on concern about global supply after a survey showed output may be lower than estimated in India, the world’s second-biggest producer. Indian sugar production may be 8.7 percent less than predicted because of lower yields in Uttar Pradesh, the biggest cane-growing state, according to 810 farmers interviewed by SGS SA for Bloomberg. Prices also gained as Australia and New Zealand Banking Group Ltd. said Brazil’s Center South region may run out of its exportable surplus by January. “Fundamentally speaking, it’s a very tight market, which is supportive,” said Fabienne Pointier, an analyst and broker at Lausanne, Switzerland-based research company Kingsman SA. “We are approaching the inter-crop season in Brazil, which means we will have lower sugar availability, and it should be a bit quieter in terms of output and export flow.” Raw sugar for March delivery gained 1.95 cents, or 7.4 percent, to 28.42 cents a pound on ICE Futures U.S. at 8:39 a.m. in New York. That was the biggest intraday rise for the sweetener since Oct. 7. Prices closed at a 29-year high on Nov. 9 and slid 21 percent in the following three days. Indian sugar output may be 23.27 million tons in 2010-2011, according to the survey. The Indian Sugar Mills Association and the Maharashtra State Cooperative Sugar Factories Federation Ltd. forecast 25.5 million tons. A smaller crop may hinder government plans to lift export restrictions, reducing global supply at a time of sustained import demand. Exports From India “We’ve also had no confirmation on Indian exports yet,” Pointier said. White, or refined, sugar for March delivery rose $42.40, or 6.3 percent, to $712.90 a metric ton on NYSE Liffe in London. Prices reached $811 on Nov. 11, the highest level since at least 1989. Brazil will only begin harvesting its 2011-12 crop in April, ANZ Bank said. “The volume of cane crushed in Brazil’s Central South fell 12 percent year-on-year in October,” Melbourne-based ANZ Bank economist Paul Deane wrote in a report dated today, referring to the country’s most productive region. Brazil’s biggest producing region “will likely have run down its exportable sugar surplus to zero by January, so supply for the first half of 2011 will remain tight.” Arabica coffee for March delivery added 2.8 percent to $2.086 a pound in New York. Robusta coffee for January delivery rose 1.7 percent to $1,889 a ton on NYSE Liffe. Cocoa for March delivery gained 2.8 percent to $2,917 a ton in New York, heading for the biggest gain in four months. The chocolate ingredient for March delivery also rose in London, climbing 1.9 percent to 1,917 pounds ($3,068) a ton. To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Source