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Sugar sinks on growing supply, traders weigh Brazil election

4 Oct 2022 9:06 am
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Mumbai, 4 OCT (Commoditiescontrol): ICE raw sugar futures hit two-month lows on Monday on growing supply availability and as traders evaluate the results of elections in top sugar producer Brazil.

ICE March raw sugar contract settled down 0.26 cent, or 1.5%, at 17.42 cents per lb, having hit its lowest since early August at $17.36/lb. December London white sugar fell $4.50, or 0.9%, at $524.20 a tonne.

Brazil's real currency and stock market surged after far-right President Jair Bolsonaro outperformed polling and clinched his place in a tense runoff vote set for Oct. 30, denying leftist Luiz Inacio Lula da Silva an outright victory in the first round.

A Bolsonaro victory is seen as mildly bearish for sugar as he is expected to keep fuel prices low - a move that would push cane mills to ramp up sugar output at the expense of cane-based biofuel ethanol.

Traders also cited selling from Indian mills that might be hedging sugar prices before the positive outlook for the country's new crop adds pressure to futures.

Elsewhere, trader Czarnikow forecast a global sugar surplus of 3.6 million tonnes in the 2022/23 season as it cut its estimate for Chinese consumption due to COVID-19 lockdowns.

ICE exchange said October deliveries were at 14,652 lots.

On Tuesday, support for March sugar contract is at 17.24 cents and 17.07 cents with resistance at 17.71 cents and 18.01 cents.

(By Commoditiescontrol Bureau: +91-22-40015505)

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