Sugar jumps on further downgrade of Brazil crop

LONDON: Sugar jumped in London on Friday, trimming the first weekly drop in three days, as further downgrades of the crop in Brazil, the biggest producer, added to supply worries. Coffee and cocoa also gained.

Brazil's sugar cane production in the Center South, the world's biggest producing region, will be 498 million tonne in the 2011-12 season, down from 525 million tonne estimated in July after last year's drought and heavy rains this year, Kingsman said. The sugar production estimate was reduced to 30.63 million tonne by Kingsman. "The reduction of the Center South Brazil production this year has taken many of us by surprise," Jonathan Kingsman, managing director of the consulting group, wrote in the report.

White, or refined, sugar for October delivery rose $10.40, or 1.3%, to $781.60 a tonne by 10:37 am on NYSE Liffe in London. Raw sugar for October delivery advanced 0.27 cent, or 0.9%, to 29.93 cents a pound on ICE Futures US in New York. Investment bank Macquarie Group lowered their estimates for the Center South crop on August 22. Sugar output in Brazil's Center South fell 3.4% in the first half of August, industry association Unica said on Thursday. Farmers in the Center South have reaped 297.6 million tonne of cane in the harvest so far, a drop of 12% from last year.