Mumbai, 10 Oct (Commoditiescontrol): Sugar prices fell to a 2-1/2-week low on Wednesday, driven by rain forecasts in Brazil's key sugar-producing regions, alleviating drought concerns. Maxar Technologies predicted that showers would continue across Brazil’s Center-South region, the top sugar-producing area, potentially improving moisture levels and boosting crop conditions.
March raw sugar futures dropped by 0.45 cents, or 2%, to settle at 22.04 cents per pound. In London, December white sugar futures also declined, falling by $11.20, or 1.95%, to close at $563.90 per ton.
The forecasted rainfall comes at a crucial time for Brazil, the world's largest sugar producer. The improved weather conditions could positively impact the country’s sugarcane crop. According to risk advisory firm Archer Consulting, Brazilian mills have already hedged 38.5% of expected sugar exports for the 2025/26 season, signaling long-term confidence in production levels.
Meanwhile, Germany’s refined sugar output from beets is expected to rise by 17% this season, reaching 4.95 million metric tons. In contrast, Russia is grappling with a 10% decline in sugar production due to poor weather conditions but plans to export 600,000 tons following the removal of an export ban.
Brazil saw a significant 23% increase in sugar exports in September, totaling 3.95 million tons, contributing to a spike in the United Nations' global food price index. Additionally, rising oil prices—driven by escalating Middle East tensions—have led sugar mills globally to allocate more sugarcane for ethanol production, potentially tightening sugar supplies.
In India, above-average rainfall forecasted for October could impact sugar production. The country is expected to have about 2 million metric tons available for export in the coming season.
Technically, traders are watching key support levels for sugar futures at 21.69 and 21.35 cents per pound, with resistance seen at 22.46 and 22.89 cents per pound.
(By Commoditiescontrol Bureau: 09820130172)
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