Sun, Oct 20, 2013 - Page 15 News List

Commodities mixed on US deal, sugar spikes on fire

SWEETENER:Sugar prices soared to a one-year high on reports that a fire badly damaged Copersucar’s terminal in Brazil, the world’s biggest producer


A mountain of burned sugar is seen at a warehouse in the port of Santos, Brazil, on Friday. A fire destroyed up to 300,000 tonnes of sugar and many of the warehouses owned by Copersucar, the world’s largest trader of the sweetener, the port authority of Santos said.

Photo: Reuters

Commodities were buoyed this week by news of a breakthrough US budget deal to avert default, but some prices fell as traders questioned whether problems would soon resurface.

Sugar was the star performer, striking a one-year peak in New York after a fire at a terminal in top producer Brazil late on Friday.

Markets breathed a sigh of relief on Wednesday when US lawmakers agreed a deal to reopen the government and avoid a debt default, which would have ravaged the global economy and demand for raw materials, analysts said.

The bill restarts government operations until Jan. 15 and raises the debt ceiling until Feb. 7.

Sentiment was lifted somewhat by news that China’s economy — a major consumer of commodities — expanded by 7.8 percent year-on-year in July to September. That snapped two quarters of slowing growth.

OIL: Crude oil prices experienced sharp swings as traders tracked the US debt deal negotiations, a weak US dollar and strong Chinese data.

Oil rallied on Wednesday, mirroring a turnaround for equities, after US lawmakers finally struck a deal aimed at avoiding a default. However, the enthusiasm was dampened by fears that the agreement was only a temporary measure.

The market also declined on Thursday after trade group the American Petroleum Institute reported a sharp increase of 5.9 million barrels in US crude inventories in the week ending Oct. 11, signaling weaker demand in the world’s biggest oil consumer.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December slid to US$109.60 per barrel from US$111.39 for the November contract a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for November slid to US$101.02 a barrel from US$102.94 a week earlier.

PRECIOUS METALS: Gold dived on Tuesday to a three-month low at US$1,251.84 per ounce, as expectations of a US deal hit the precious metal’s safe-haven status.

However, gold rebounded back above US$1,300 after Wednesday’s agreement, as the US dollar dived to 8.5-month lows against the euro.

By late Friday on the London Bullion Market, the price of gold rallied to US$1,316.50 an ounce from US$1,265.50 a week earlier.

Silver edged up to US$21.87 an ounce from US$21.52.

On the London Platinum and Palladium Market, platinum gained to US$1,438 an ounce from US$1,369.

Palladium rose to US$737 an ounce from US$712.

BASE METALS: Base or industrial metals won only modest support from strong Chinese economic growth data.

By Friday on the London Metal Exchange, copper for delivery in three months rose to US$7,273 a tonne from US$7,167.75 a week earlier.

Three-month aluminum eased to US$1,855 a tonne from US$1,886.

Three-month lead increased to US$2,185 a tonne from US$2,097.25, while three-month tin slid to US$23,000 a tonne from US$23,345.

SUGAR: New York prices surged to a one-year high point on reports of a major fire at a terminal in Brazil.

According to media reports, a fire badly damaged the Copersucar terminal at Brazil’s port of Santos in Sao Paulo state. Brazil is the world’s biggest sugar producer.

In Friday deals on New York’s NYBOT-ICE exchange, sugar soared to US$0.2016 a pound (0.45kg) — the highest since Oct. 22 last year.

On LIFFE, London’s futures exchange, sugar prices vaulted as high as US$529.40 per tonne, reaching a level last witnessed on March 22.

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