Mumbai, 19 May (Commoditiescontrol): ICE Sugar prices Wednesday posted moderate losses tracking weakness in crude and investor fears over frost risk in top producer Brazil began to fade.
July raw sugar settled down 0.17 cents, or 0.9 percent, at 19.83 cents per lb, having hit a one month high of 20.24 cents on Tuesday. August white sugar lost $0.80, or 0.1 percent, at $554.00 a tonne.
Weakness in crude undercut sugar prices as crude on Wednesday fell more than 2 percent. Further, fears over risk from frost in Brazil has reduced. Climatempo said Wednesday that winds and clouds in southern Brazil prevented a severe drop in temperatures that removed the threat of frost from developing.
The outlook for bigger global sugar supplies is negative for prices. Green Pool Commodity Specialists on April 29 shifted its projection for the 2022/23 global sugar market to be in surplus by 1.41 MMT versus a January forecast of a 742,000 MT deficit.
A bearish factor for sugar was the projection from Conab on April 27 for Brazil 2022/23 sugar production to increase by 15 percent on year to 40.3 MMT as the crop recovers from the past season's adverse weather. Also, the USDA's FAS on April 22 projected Brazil's 2022/23 sugar production would climb 2.9 percent on year to 36.37 MMT and that 2022/23 Brazil sugar exports would increase by 3.7 percent on year to 26.6 MMT. In the shorter term, however, Unica reported last Thursday that Brazil's 2022/23 Center-South sugar production through April fell 50.6 percent on year to 1.066 MMT.
The outlook for larger sugar crop sizes in India and Thailand is bearish for sugar prices. On April 15, the Indian Sugar Mills Association (ISMA) raised India's 2021/22 sugar production estimate to 35 MMT from 33.3 MMT, up 12.2 percent on year, and said sugar exports would jump to a record 9 MMT. India is the world's second-largest sugar producer.
Meanwhile, the Thailand Office of the Cane & Sugar Board reported on March 22 that Thailand's 2021/22 sugar production from Dec 7-Mar 19 was at 9.6 MMT, and the total Thailand 2021/222 sugar harvest Dec 7-Mar 31 may reach 10 MMT, a 3-year high. As a result, the Thailand Office of the Cane & Sugar Board expects Thailand to export 7 MMT of sugar this (2021/22) marketing year. Thailand is the world's second-largest sugar exporter.
For Thursday, support for the July raw sugar contract stands at 19.67 cents and resistance at 20.06 cents.
(By Commoditiescontrol Bureau: +91-22-40015505)
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