sugar increases with brazil supply curbs

White Sugar Posts Biggest Weekly Gain in Eight on Supply Curbs

June 6 (Bloomberg) -- White sugar posted its biggest weekly gain in eight in London as demand rose amid curbs on supply in Brazil and Thailand, the world's biggest exporters. Robusta coffee fell and cocoa rose.

Sugar output in Brazil's Center South, which accounts for about 80 percent of the country's crop, dropped 25 percent this year as rains pared yields and mills focused on ensuring ethanol supply, industry group Unica said last week. Thai producers are selling at higher prices on the local market, while demand in West Africa and Russia is rising, according to Fortis.

``The only two origins that can deliver at the moment are the Thais and Brazil and both have domestic markets that are trading higher than the futures markets,'' James Kirkup, a sugar broker at Fortis, said by phone from London. ``India is now effectively closing down because of the monsoon.''

White sugar for August delivery rose $6.90, or 2.1 percent, to $339.90 a metric ton on the Liffe exchange in London. Sugar gained 4.7 percent this week.

``Demand is strong for 150 Icumsa sugar in West Africa,'' a lower quality grade than 45 Icumsa traded on Liffe, Kirkup said. ``Russia is also in play for'' raw sugar. Prices for ``freight have been easing,'' he added.

The International Commission for Uniform Methods of Sugar Analysis sets grades for the commodity.

Russia, the world's biggest sugar buyer, is boosting imports after cutting tariffs on the commodity to $140 a ton from $220 a ton this month. Shipments from Brazil rose in May compared with a year earlier, according to Societe Kingsman SA.

Among other agricultural commodities, cocoa for July delivery climbed 44 pounds, or 2.9 percent, to 1,560 pounds ($3,072) a ton on Liffe. Robusta coffee for delivery in July fell $42, or 1.9 percent, to $2,226 a ton.