Mumbai, 16 Jan (Commoditiescontrol): White sugar futures on ICE dropped to their lowest level in more than three years on Wednesday, driven by speculation that India might ease its export restrictions.
The March London white sugar contract declined by $8.70, or 1.8%, to settle at $472.50 per metric ton, touching a low of $470.50—the weakest since September 2021. Raw sugar futures also fell, slipping 1.7% to 18.01 cents per pound after reaching a 4.5-month low of 17.92 cents.
Market sentiment turned bearish following reports suggesting that India, the world’s second-largest sugar producer, may approve exports of up to one million metric tons of sugar. However, skepticism remains due to a significant decline in India's domestic sugar production this season.
The Indian Sugar and Bio-energy Manufacturers Association (ISM) reported that sugar output from October 1 to December 31 fell by 15.5% year-on-year to 9.54 million metric tons (MMT). This decline could prompt the Indian government to maintain restrictions on sugar exports, potentially limiting global supply.
Adding to the bearish outlook, Thailand, the world’s third-largest sugar producer and second-largest exporter, is projected to increase sugar production by 18% in the 2024/25 season. Thailand’s Office of the Cane and Sugar Board estimates production will reach 10.35 MMT, up from 8.77 MMT in the previous season. The anticipated increase, along with a suspension of syrup exports to China, has added pressure to the market.
Meanwhile, Chinese authorities have requested inspections of Thai factories before lifting a ban imposed last month on sugar syrup and premixed powder exports, potentially delaying shipments from Thailand.
Technically, sugar prices remain volatile. Support levels are identified at 17.81 and 17.60 cents per pound, with resistance at 18.33 and 18.64 cents. Market dynamics such as weather conditions in Brazil, ethanol production trends, and updates from major producing regions are expected to influence prices in the coming weeks.
Despite the bearish sentiment, ongoing concerns about India’s reduced sugar output provide a counterbalance, keeping traders cautious about the potential for tighter global supplies.
(By Commoditiescontrol Bureau: 09820130172)