Mumbai, 23 Apr (Commoditiescontrol): ICE raw sugar futures recorded modest increase on Monday, as latest estimates suggest lower production in Brazil as against previous expectation.
Sugar prices have some carryover support from last Thursday when Conab cut its Brazil 2023/24 sugar production estimate by 2.6% to 45.7 MMT from a November estimate of 46.9 MMT. Conab's Brazil sugar production estimate was reduced since Conab raised its Brazil 2023/24 ethanol production estimate to 29.7 bln liters from a November estimate of 28 billion liters.
ICE sugar futures for May delivery settled up 0.07 cents or 0.4% at 19.80 cents per lb, after slumping to the lowest price since late December in the previous session. It lost 10% for the week.
May London ICE white sugar contract rose $6.90 or 1.2% at $610.40 a metric ton, coming off 12-month low recorded in the previous session. The contract ended the week 6.7% softer.
A total of 313,950 tons of white sugar have been tendered against the May contract on ICE Futures Europe, exchange data showed on Tuesday.
Dealers said supportive factors included dry weather in the Centre-South region of Brazil with the potential for lower yields in the 2024/25 season.
Sugar has been hit recently by ideas of better supplies from Asia and Brazil, but dealers said the fall attracted some bargain buying on Thursday.
Recent rain in Brazil led the improved outlook for cane production in the 2024/25 season and a weakening of the Brazilian currency is likely boosting selling by mills there. Brazil's real hit a one-year low on Tuesday.
While robust sugar output in Brazil undercut prices, weaker Brazilian Real encourages exports. The natural sweetener was already under pressure due to the bearish carryover from last week's increased sugar production outlook.
Last week, Vietnam's Office of the Cane and Sugar Board reported that Thailand's 2023/24 sugar production from Dec-Mar was 8.75 MMT, above a Feb estimate from the Thai Sugar Millers Corp for sugar production of 7.5 MMT.
Fitch Solutions report suggested that the decreased sugarcane plantings in key Indian states, alongside an anticipated reduction in Brazil's centre-south region production for the 2024/25 season, are supporting sugar prices. It added, however, that current strong production out of Brazil is capping sugar's gains.
Earlier, the Indian Sugar and Bioenergy Manufacturers Association reported that India's 2023/24 sugar production from Oct-Mar rose 0.4% on year to 30.2 MMT as more sugar mills stayed open to crush sugarcane. As of March 31, 322 Indian sugar mills had closed operations, compared with 346 mills that were closed at the same time last year.
Egypt's GASC bought 250,000 tons of raw sugar in a tender.
Commodity Futures Trading Commission (CFTC) data on showed speculators have reduced 11,669 contracts to their net long position in raw sugar to 26,860 lots.
For Tuesday, support for the Jul Sugar contract is at 19.45 cents and 19.30 cents, with resistance at 19.84 cents and 20.08 cents.
(By Commoditiescontrol Bureau: 09820130172)
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