Mumbai, 17 Jul (Commoditiescontrol): ICE sugar futures faced moderate losses on Tuesday, pressured by a decline in crude oil prices. August WTI crude oil hit a three-week low, leading to a drop in ethanol prices. This may incentivize global sugar mills to prioritize sugar production over ethanol, increasing sugar supplies.
The October raw sugar contract on ICE fell by 0.7%, or 0.14 cents, closing at 19.62 cents per pound, after reaching a 2.5-month high the previous week. Despite nearly a 5% decline over the week, the contract showed significant recovery. Similarly, the August ICE white sugar contract in London dropped by $0.60, or 0.11%, closing at $571.00 per metric ton.
The recent surge in sugar prices was attributed to reports of below-normal monsoon rains in India, the world's second-largest sugar producer. According to the Indian Meteorological Department, India received 287.7 mm of rain during the current monsoon season as of July 15, 2% below the long-term average of 294.2 mm.
Sugar prices initially fell, with NY sugar hitting a three-week low due to robust output in Brazil, the world's largest sugar producer. Unica reported that Brazil's sugar production for the 2024/25 crop year through June increased by 15.7% year-on-year to 14.2 million metric tons (MMT). The proportion of Brazil's sugar cane crop crushed for sugar rose to 48.72% from 47.69% last year.
Throughout the week, sugar prices experienced moderate declines, with London sugar hitting a one-week low on Friday. This was influenced by the Indian Sugar and Bio-energy Manufacturers Association's (ISMA) forecast of higher reserves, leading to a call for the government to permit surplus sugar exports. ISMA maintained India's 2023/24 sugar reserves at 9.1 MMT with a surplus of 3.6 MMT, urging the government to reconsider export restrictions. India extended its export restrictions from October 31 until further notice to ensure adequate domestic supplies. In the 2022/23 season, India allowed mills to export only 6.1 MMT of sugar, down from a record 11.1 MMT in the previous season.
Brazil exported 3.20 million tons of sugar in June, up from 2.87 million tons a year earlier. Persistent dry weather in Southeast Asia and Latin America, especially in Brazil, has supported sugar prices. Additionally, a fungal disease affecting sugar crops in Uttar Pradesh, India, has contributed to firm prices.
Earlier in the week, sugar futures in New York and London showed resilience, bolstered by India's decision to maintain export restrictions, stabilizing the global market. Traders responded to concerns over lower-than-expected global production levels by covering short positions, further boosting prices.
The Commodity Futures Trading Commission (CFTC) reported that speculators reduced their short positions in raw sugar on ICE U.S. by 12,547 lots to 35,813 lots. Analysts are closely monitoring technical support and resistance levels for the October sugar contracts, identifying key levels at 19.48/19.34 cents and 19.82/20.20 cents, respectively.
(By Commoditiescontrol Bureau: 09820130172)
0 Comments 
Post Comment 
