Sugar Rises as India May Limit Export Sales; Coffee, Cocoa Drop.

Sugar rose for a fourth straight session on speculation that India, the world’s second-largest producer, may limit exports as it rebuilds inventories. Coffee and cocoa declined.

India was the world’s largest importer of the sweetener last year as adverse weather damaged crops. Stockpiles are at about 4 million metric tons, compared with the nation’s preferred level of 10 million tons, according to Rabobank International. The price jumped 24 percent in October, the biggest monthly gain since August 2009.

“Inventory levels are so low that they can’t afford to export,” said Carsten Fritsch, a Frankfurt-based analyst at Commerzbank AG. “If they decide to do so, they risk becoming a net importer again next year if the 2011 harvest disappoints.”

Raw sugar for March delivery climbed 0.33 cent, or 1.1 percent, to settle at 29.45 cents a pound at 2 p.m. on ICE Futures U.S. in New York.

In London, refined-sugar futures for March delivery gained $11, or 1.5 percent, to $735 a ton on NYSE Liffe.

China may sell more sugar from stockpiles to ensure local supply, the industry website Gsmn.cn reported today, without citing anyone.

Rising Chinese Imports?

Prices rose on speculation that “China may import sugar, as it would need to rebuild inventories after selling from its reserves,” said Ricardo Scaff, a trader at Rabobank International in London.

Arabica-coffee futures for December delivery declined 5.75 cents, or 2.8 percent, to $1.977 a pound on ICE. Robusta-coffee futures for January delivery lost $42, or 2.1 percent, to $1,928 a ton on Liffe.

Output in Vietnam, the largest robusta producer, may increase 1.3 percent to 1.184 million tons in the year that began Oct. 1, said SWC Commodities Ltd., citing a poll of growers, agents and shippers.

Cocoa futures for December delivery fell $38, or 1.4 percent, to $2,759 a ton in New York.

Ivory Coast, the world’s largest grower, held its first presidential election in a decade yesterday.

Economic development has been stunted since a 2002 military uprising led to civil conflict and division between a rebel-held north and a government-controlled south. The country relies on cocoa for more than a quarter of its export earnings.

In London, cocoa futures for December delivery dropped 14 pounds, or 0.8 percent, to 1,842 pounds ($2,954) a ton.

Source : businessweek.com