Mumbai, 10 Dec (Commoditiescontrol): Sugar prices fell on Monday, retreating from one-week highs as forecasts of rainfall in Brazil’s Center-South region, the country’s main sugar-producing area, weighed on market sentiment.
March raw sugar futures on ICE dropped by 0.31 cents, or 1.42%, to 21.50 cents per pound, while London December white sugar futures declined by $6.00 to $555.00 per metric ton.
Despite the decline, analysts at Citi remain optimistic about a price rebound, citing concerns over Brazil's next crop and a tight global sugar supply. The bank reiterated its three-month price target of 24 cents per pound and revised its 12-month forecast to 25 cents per pound.
Last week, sugar prices hit 2.5-month lows as the global supply outlook improved. The International Sugar Organization (ISO) recently reduced its forecast for the 2024/25 global sugar deficit to 2.51 million metric tons (MMT), down from an August estimate of 3.58 MMT. The ISO also raised its 2023/24 global sugar surplus projection to 1.31 MMT, compared to the previous forecast of 200,000 metric tons.
Higher sugar production estimates from Thailand have added bearish pressure to prices. Thailand's Office of the Cane and Sugar Board projected that the country’s 2024/25 sugar production will rise by 18% year-on-year to 10.35 MMT, up from 8.77 MMT in the previous season. Thailand is the world’s third-largest sugar producer and second-largest exporter.
Meanwhile, sugar output from Brazil’s Center-South region has slowed. Data from Unica showed that sugar production during the first half of November fell by 59.2% year-on-year to 898 metric tons. For the 2024/25 season through mid-November, cumulative output is down 3.0% year-on-year at 38.274 MMT.
In India, sugar export restrictions may continue as the government allows more ethanol production. The Indian Sugar and Bio-energy Manufacturers Association (ISMA) reported that sugar production from October to April in the 2023/24 season fell by 1.6% year-on-year to 31.4 MMT.
From a technical standpoint, raw sugar prices remain volatile, with support levels at 21.27-21.03 cents per pound and resistance at 21.82-22.13 cents. Market participants are closely watching weather developments in Brazil, global ethanol trends, and production adjustments in key regions. Despite the recent decline, supply constraints and climate uncertainties are expected to provide continued support to prices in the medium term.
(By Commoditiescontrol Bureau: 09820130172)
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