Sugar Prices End Mixed as Weather Forecasts and Energy Markets Influence Trade

Mumbai, 9 Oct (Commoditiescontrol): Sugar prices ended mixed on Tuesday, influenced by weaker crude oil prices that reduced demand for ethanol and forecasts of rain in Brazil’s key sugar-producing regions, leading to long liquidation in sugar futures.

March raw sugar futures slipped by 0.06 cents, or 0.3%, closing at 22.49 cents per pound, while December white sugar futures in London rose by $4.90, or 0.9%, to settle at $575.10 per ton.

Weather forecaster Maxar Technologies predicted significant rainfall this week and into the next for Brazil, which could improve moisture levels and boost crop conditions in the world's largest sugar producer. However, rising energy prices are lending some support to sugar markets, as higher oil prices make ethanol production more lucrative, potentially diverting more sugarcane toward ethanol.

In Germany, refined sugar production from beets in the ongoing season is forecast to increase by 17%, reaching around 4.95 million metric tons. Meanwhile, Brazil's mills have hedged 38.5% of the expected sugar exports for the 2025/26 season, according to Archer Consulting.

The recent surge in sugar prices, especially in September, contributed to the largest rise in the United Nations' global food price index in 18 months. Brazil saw a 23% year-on-year increase in sugar exports in September, reaching 3.95 million tons. Rising oil prices, driven by escalating tensions in the Middle East, have further encouraged ethanol production, as mills globally shift more sugarcane to ethanol, potentially reducing sugar supply.

In India, above-average rainfall is expected in October, which could affect sugar production, while the country is projected to have around 2 million metric tons available for export in the upcoming season. Brazil's sugar output is forecast to rise by 2.5% next season, though weather-related disruptions could still impact cane crushing. Russia, facing a 10% drop in sugar production due to adverse weather, plans to export 600,000 tons after lifting its export ban.

Traders are closely monitoring key technical levels, with support for sugar futures at 22.23 and 21.97 cents per pound, and resistance at 22.72 and 22.95 cents per pound.

(By Commoditiescontrol Bureau: 09820130172)