May 1 (Bloomberg) -- Sugar prices in New York surged to the highest since July 2006 on forecasts for a global supply deficit sparked by a record drop in output in India, the world’s second- largest producer. Cocoa futures dropped.India’s output will be 14.7 million metric tons in the 12 months ending Sept. 30, down from a February forecast of 17 million tons, Czarnikow Group Ltd. said yesterday. Global demand will exceed production by 9 million tons, Sucden Financial Ltd. said this week.
Raw-sugar futures for July delivery rose 0.69 cent, or 4.8 percent, to 15.05 cents a pound on ICE Futures U.S. in New York. Earlier, the price reached 15.13 cents, the highest for a most- active contract since July 26, 2006.
Prices climbed for the fourth straight day amid speculation that 810,000 metric tons will be delivered to India and other countries, said Michael McDougall, a senior vice president for Newedge USA LLC in New York. The price may reach 15.44 cents, McDougall said in a report.
A rally in global equities also boosted futures, he said.
This week, the price gained 6.1 percent, the most in four months. Brazil is the world’s biggest sugar producer.
“The decline in Indian production has exceeded all expectations and has once again seen India become the critical factor in the global sugar market,” Czarnikow said.
On ICE, cocoa futures for July delivery fell $51, or 2.1 percent, to $2,324 a metric ton. The price slumped 5.2 percent this week.
To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net.
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