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Expected Surge of Thailand Exports Drive Sugar Down

May 4, 2011 at 23:17 by Vladimir Vyun

Sugar prices fell to the lowest level since September as specialists forecast that exports from Thailand, second biggest shipper in the world, will increase. Cocoa and coffee also fell.

Thailand may export 7 million metric tons of sugar this season, and that would be a record. Analysts are afraid that surge of exports can create oversupply on the global markets.

At the same time, demand for the sweetener may decline as Asian countries are expected to slow their economic growth. India and Brazil signaled that they are considering another round of interest rate increases, while China continues its attempts to rein the rapidly growing inflation.

July for raw sugar delivery fell as much as $0.007 (3.2 percent) to $0.2135 per pound by 14:00 on ICE, following the drop to $0.2133, the lowest price since Sept. 10. Futures on raw sugar lost 34 percent this year.

July contract for cocoa delivery slipped $60 (1.8 percent) to $3,211 per metric ton at 11:58. Futures on Arabica coffee for delivery in July dropped $0.1165 (3.8 percent) to $2.945 per pound.

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