Mumbai, 2 May (Commoditiescontrol): ICE raw sugar futures extended their decline on Wednesday, tracking the slide in crude oil prices. The weakness in crude oil weighs on ethanol prices and may prompt global sugar mills to divert more cane crushing to sugar production instead of ethanol, thus boosting sugar supplies.
ICE sugar futures for May delivery settled down 0.19 cents or 0.98% at 19.22 cents per lb, after slumping to the lowest price since late December in the previous session. It lost 7.1% this week.
August London ICE white sugar contract lost $1.00 or 0.18% at $568.30 a metric ton.
ICE confirmed on Wednesday a large delivery on the expiring May contract of around 1.67 million tons.
Traders were split on the possible impact to the market of such a large delivery, which would usually be a bearish sign.
Meanwhile, on Monday, Thailand's Meteorological Department said that more than three dozen of Thailand's 77 provinces had posted record-high temperatures this month, with new highs beating records as far back as 1958.
In recent times, Sugar has been hit by ideas of better supplies from Asia and Brazil, but dealers said the fall attracted some bargain buying on Thursday.
Spell of 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.
Brazilian crop agency - Conab, on Thursday projected that Brazil's 2024/25 sugar production will climb 1.3% y/y to a record 46.292 MMT as 2024/25 sugar acreage in Brazil increases by 4.1% to 8.7 million hectares (21.5 million acres), the most in seven years. For the 2023/24 marketing year, however, Conab last Thursday cut its Brazil sugar production estimate by 2.6% to 45.7 MMT from a November estimate of 46.9 MMT.
lsewhere, 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.
India's sugar consumption this year is poised to hit a record high as demand during the peak summer season gets a boost from heat waves and the mobilisation of millions for elections in the scorching temperatures.
Brazil's sugarcane crush at the first half of April is seen nearly 15% up year-on-year in a S&P Global Commodity Insights survey of analysts. Industry group UNICA is expected to release the data later this week.
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 increased their net short position in raw sugar by 17,471 lots to 28,025 lots.
For Thursday, support for the Jul Sugar contract is at 19.05 cents and 18.87 cents, with resistance at 19.44 cents and 19.65 cents.
(By Commoditiescontrol Bureau: 09820130172)
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