Brazil, the biggest sugar and coffee grower, had the driest January in six decades, scorching crops. Arctic-like cold is projected for the eastern two-thirds of the U.S. at the end of the month, boosting demand for natural gas.
The Oct. 18 fire at the Santos Port terminal in Brazil turned out to be a one-day event. A combination of other ports picking up some of the slack and a well-supplied world market has allowed sugar prices to fall back to the lows.
On the morning of Oct. 18, sugar prices were consolidating a 3¢-cent-per pound rally that began in mid-July. Then news broke that a massive fire broke out at Santos Port terminal, the largest in Brazil. March sugar spiked up by over 1¢-cent-per pound.
Sugar prices have bounced off multi-year lows, possibly because of the upcoming expiry of the October contract, a prevalent pattern for expiries over that past year and a half. Developments on the supply/demand front have been mixed.
Brazil’s real rose to a seven-week high on speculation the next U.S. Federal Reserve chairman will maintain stimulus for a longer period, supporting efforts by the Latin American nation’s central bank to bolster the currency.