Sugar price bottomed I reckon..Stock may be over the big...

Sugar price bottomed I reckon..

Stock may be over the big sellling and capital raising..

Sugar Jumps Most in Three Months on Brazilian Supply Concerns

By Ron Day

Sept. 19 (Bloomberg) -- Sugar jumped 4 percent, the most in three months, after C. Czarnikow Sugar Ltd. said supplies will tighten as Brazil diverts more of its cane harvest, the world's biggest, to ethanol production.

``Brazilian sugars will become increasingly scarce over the next few months,'' and output next year will trail forecasts, Czarnikow said. A Brazilian industry group said production in the main growing area fell 8.8 percent this year because more cane was used for ethanol, a gasoline additive. Before today, the price of sugar tumbled 22 percent in the past year.

``This is triggering funds to come in and buy,'' said Bernard Isler, an analyst with Trendex Commodity Corp. in Plantation, Florida. ``This market's been down so long. Today, we're getting the spark we needed.''

Sugar futures for March delivery rose 0.38 cent, or 4 percent, to 9.99 cents a pound on the New York Board of Trade. The percentage gain was the biggest since June 18. The price earlier reached 10.01 cents, the highest since Aug. 7.

The price of crude oil surged to a record $82.51 a barrel today in New York.

Production in Brazil's center-south, which accounts for 85 percent of sugar output, will fall 2.3 percent to about 25.1 million metric tons in the 2007-2008 year, analysts at London- based commodity broker Czarnikow said.

In the year through August, center-south production dropped to 15.5 million metric tons, the Center-South Sugar and Ethanol Industry Association, known as Unica, said today. The region's ethanol production in the period rose to 11.3 billion liters from 10.1 billion.

Brazil estimates its 2007 cane output at 514.1 million metric tons.

The International Sugar Organization had forecast a global cane surplus of 10.8 million tons this year.

To contact the reporter on this story: Ron Day in New York at [email protected] .

Last Updated: September 19, 2007 16:11 EDT