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White Sugar Rises On India’s Supply Disruption Concerns, ICE Raw Sugar Settles Lower

27 Mar 2020 8:08 am
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Mumbai (Commodities Control) –Sugar prices on Thursday settled mixed with London sugar above 1 week’s high on concern about supply disruptions. While NY sugar was below Wednesday's 1 ½ week high.

In India, several ports and terminals have declared force majeure due to shutdowns from the coronavirus pandemic. The Indian Sugar Mills Association (ISMA) on Wednesday said that India's cane crushing may be affected during the 3-week long lockdown imposed by the Indian government to slow the spread of the coronavirus.

White sugar futures in London surged more than 3% boosted by potential disruptions to shipments in India. May white sugar ​​settled up $11.50, or 3.4%, at $350.40 a tonne.

While May raw sugar ​​settled down 8 cents, or 0.7%, at 11.33 cents per lb, as oil prices had another negative day.

Sugar prices found support on Thursday on the outlook for reduced sugar production in India after the Indian government asked sugar mills and distilleries to ramp up production of hand sanitizers to combat the spread of the coronavirus pandemic.

One negative, however, for sugar was Wednesday's forecast from Rabobank for a global 2020/21 sugar surplus of 0.6 MMT compared with a 6.7 MMT sugar deficit for 2019/20.

Brokers say that lockdown in India could hurt the flow of white sugar from the country.

"In theory, the ports are exempt from the lockdown, but many of the workers were already concerned and many fled... This leaves sugar already sold with no way to get out," he said.

Meanwhile, Brazilian sugar mills were quick to start cane crushing in the new center-south season, processing 3 million tonnes in the first half of March, 88% more than in the same period a year earlier.

Rabobank projects that India's 2020/21 sugar production will climb 15.9% y/y to 33.5 MMT and that EU 2020/21 sugar output will climb 4% y/y to 18.3 MMT.

Support and Resistance for sugar #11 lies at 11.06 cents and 11.72 cents/lb, respectively.

(Commodities Control Bureau)

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