Mumbai, 30 Sep (Commoditiescontrol): ICE Raw sugar futures closed up on Thursday ahead of near-month futures contract expiry while short term supply tightness encourged traders to keep aside macro worries for now.
ICE October raw sugar, which expires on Friday, settled up 0.15 cents, or 0.8%, at 18.44 cents per lb. The contract touched a two-month high of 18.75 cents on Monday. December London white sugar rose $2.30, or 0.4%, at $529.80 a tonne.
Dealers said uncertainty over the latter part of the harvest in Brazil is underpinning prices, but they also noted a likely global surplus next season and uncertain demand.
On fundamental front, a mixed bag of forecast continue to linger. Among positive the prospect of China imports and Brazil's sugar output are playing at the top of traders mind.
Major sugar consumer China set its 2023 sugar import quota at 1.945 million tonnes, unchanged from the previous year. Also, a decline in Brazil's Center-South sugar output is bullish for prices after Unica reported Tuesday that Center-South sugar output in the 2022/23 marketing year through mid-Sep was down 8.4% on year to 24.634 MMT.
In a supportive factor, Conab, on August 19, cut its estimate for the 2022/23 Brazil sugar crop to 33.9 MMT from an April forecast of 40.3 MMT, citing lower plantings and falling sugar cane yields.
This summer's hot and dry weather in Europe, the world's third-largest sugar producer, caused smaller sugar beet yields and lower sugar production, which is bullish for sugar prices. Czarnikow Group predicts sugar output in the European Union (EU) and the UK should total 16.4 MMT this year, about 1 MMT lower than last year, which means the EU may have to import more sugar than usual.
A bearish factor for sugar was last Monday's projection from StoneX for Brazil Center-South 2023/24 sugar production to climb 5.7% on year to 35.2 MMT. StoneX also projects that global 2023/24 sugar production would climb 3% on year to 194.4 MMT on rising supplies from Brazil, India, and Thailand. StoneX predicts a 2022/23 global sugar surplus of 3.9 MMT.
In a bearish factor, India's government, on August 5, confirmed that it would allow a further 1.2 MMT of sugar exports for the year ending September 30 to help India's sugar mills from defaulting on export contracts. That would be on top of the current quota of 10 MMT for a total of 11.2 MMT of sugar exports.
For Friday, support for October raw sugar is at 17.67 cents and 17.56 cents, with resistance at 17.84 cents and 17.90 cents.
(By Commoditiescontrol Bureau: +91-22-40015505)
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