Mumbai, 06 Dec (Commoditiescontrol): Global sugar prices remained under pressure on Thursday, posting modest losses as improved supply dynamics weighed on market sentiment.
In India, sugar prices hit a 1.5-year low due to abundant supplies, creating financial challenges for mills to meet farmers' cane payment obligations as the crushing season progresses, according to media reports.
March raw sugar futures on ICE dipped by 6 cents, or 0.28%, to settle at 21.20 cents per pound, while London December white sugar futures slipped $0.20 to close at $550.20 per metric ton. Earlier this week, raw sugar prices briefly rebounded from a two-month low of 20.70 cents per pound.
A downward revision in global supply deficits added to the bearish tone. On November 21, the International Sugar Organization (ISO) reduced its 2024/25 global sugar deficit forecast to 2.51 million metric tons (MMT) from a previous estimate of 3.58 MMT. Simultaneously, the ISO raised its 2023/24 global sugar surplus projection to 1.31 MMT, up from 200,000 MT in August, signaling improving supply conditions.
Brazil, the world’s largest sugar producer, continues to influence global markets. A weaker Brazilian real has boosted the country’s export competitiveness, although recent rains in Center-South Brazil are expected to support crop prospects for the upcoming season. Datagro analysts forecast Brazilian sugar production to recover significantly in the 2025/26 season, with output expected to reach between 42 and 43.2 MMT.
Short-term data, however, reveals production constraints. According to Unica, sugar output in Brazil's Center-South region dropped 59.2% year-on-year to 898,000 metric tons in early November. S&P Global reported a similar decline of 55.5% over the same period.
Elsewhere, French sugar beet production is projected to rise by 2.5% this year, adding to the positive supply outlook. Despite these trends, Citi analysts remain cautiously optimistic, maintaining a three-month price target of 24 cents per pound and a 12-month forecast of 25 cents.
From a technical perspective, sugar prices are finding support between 20.92 and 20.64 cents per pound, with resistance levels at 21.38 and 21.56 cents. Traders are closely monitoring weather risks, Brazil’s production recovery, and ethanol demand as key factors likely to drive price movements. In the near term, volatility is expected to persist as the market adjusts to these evolving dynamics.
(By Commoditiescontrol Bureau: 09820130172)
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