Sugar prices fall the most in 22 yrs in New York

NEW YORK: Refined-sugar prices plunged by a record in London, and raw-sugar futures in New York tumbled the most in 22 years as speculation that China will boost borrowing costs roiled commodity markets.

China may increase interest rates soon in a bid to cool inflation, according to Bloomberg News survey. Raw materials tumbled on concern that demand for crops will ease in the Asian nation, the biggest consumer of many commodities.

Prices also fell after ICE Futures US raised margins on contracts by 65%. Europe announced plans to increase sugar exports. The commodity market overall has turned bearish, and a lot of traders have become risk averse, said Ricardo Scaff, a trader at Rabobank International in New York.

The European Union news is negative, and it has become expensive for some funds to hold positions with the jump in the margin requirements. Refined-sugar futures for March delivery fell $91.50, or 12%, to close at $677.10 a tonne, marking the biggest drop ever.

The price fell 2.8% on Friday after the EU said it also plans to lift import duties. Raw-sugar futures plunged 3.45 cents, or 12%, to settle at 26.21 cents on ICE. The single-day drop and this week’s slide of 17% were the most since July 1988.