Raw Sugar Extends Longest Slump since August 2012 on Supply Glut

Sugar extended the longest slump in more than 15 months as processors are beginning to turn cane into sweetener in India, the world’s second-biggest producer, at a time when inventories are swelling to a record.

Mills in Uttar Pradesh, the largest cane grower in India, will start operating by Dec. 12, and output won’t be affected by the delay caused by a shutdown over a dispute on crop prices, C.B. Patodia, president of Uttar Pradesh Sugar Mills Association, said on 2 December. Thailand, the top shipper after Brazil, aims to increase sugar production by 10 percent to 11 million metric tons even after crushing was delayed, the Office of the Cane and Sugar Board said.

Global stockpiles will increase 0.5 percent to an all-time high of 43.379 million tons in the season ending by September for most countries, from a year earlier, as production outstrips consumption for a fourth year, the U.S. Department of Agriculture said Nov. 21. Prices are heading for a third straight annual decline, the longest slump in 21 years..

Ethanol Producer

Brazil, the largest producer of ethanol from sugarcane, may start making the biofuel from corn, after a record harvest of the grain caused domestic prices to slump below cost, Neri Geller, the agriculture policy secretary, said in a telephone interview on 3 December.

Brazil’s real fell to the lowest since Sept. 3 against the dollar, increasing the incentive for growers to increase exports priced in the U.S. currency.