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ICE Raw Sugar Slides As Crude Hits 13 Months Low; Sucden Sees Near-Term Sideways Trade

27 Feb 2020 7:36 am
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Mumbai (Commodities Control) – ICE sugar prices slid on Wednesday as U.S. crude oil dropped below $50 a barrel after Asia, Europe and the Middle East reported hundreds of new coronavirus cases and the United States warned the disease could spread.

March raw sugar fell 36 points to settle at 14.79 cents per lb, having traded as low as 14.69 cents a pound and May contract ended 20 points lower to close at 14.54 cents/lb.

May white sugar fell $6.90, or 1.7%, to $405.80 a tonne, having hit its lowest since late January at $400.

Oil prices hit their lowest since January 2019 as authorities around the world battled to prevent the spread of coronavirus, which has now been found in about 30 countries.

Weaker energy prices can encourage cane mills in Brazil to produce more sugar at the expense of biofuel ethanol. Cane is a feedstock for both products.

Sugar dealers remain concerned about a widening deficit this season and possibly next, with production falling in key producers such as Thailand and India.

"There continues to be a 'window' of upside opportunity in sugar before our main harvest starts but alas 'the global health event' is crushing optimism. We expect the market to trade sideways in the short term," said Sucden Financial.

Support and Resistance for Sugar #11 lies at 14.25 cents and 14.87 cents/lb, respectively.

(Commodities Control Bureau)

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