Mumbai, 22 Jan (Commoditiescontrol): Raw sugar futures dropped to a five-month low on Tuesday, pressured by news of India resuming sugar exports and an improving global supply outlook.
The March raw sugar contract on ICE fell by 0.43 cents, or 2.4%, to close at 17.79 cents per pound, after touching a session low of 17.57 cents. London white sugar also declined by 1.7%, or $7.90, settling at $466.40 per metric ton, having hit its lowest level since August 2021 at $462.60 earlier in the day.
This extended a prolonged sell-off in sugar markets, with ICE raw sugar and London white sugar both hitting multi-month lows. The decline was attributed to improving global supply prospects. India, the world’s second-largest sugar producer, announced it would allow the export of 1 million metric tons (MMT) of sugar this season, easing restrictions imposed in October 2023 to ensure domestic availability. During the 2022/23 season, India limited exports to 6.1 MMT, a sharp drop from the record 11.1 MMT exported the previous year.
Analysts at Commerzbank noted that while India’s export quota is moderate, it adds to a more favorable supply picture, limiting further price drops. Additionally, Brazilian sugar production has not declined as sharply as previously feared, further contributing to improved supply conditions.
The International Sugar Organization (ISO) revised its global sugar deficit estimate for the 2024/25 season downward to 2.51 MMT, from an earlier projection of 3.58 MMT. The ISO also raised its 2023/24 surplus estimate to 1.31 MMT, up from 200,000 metric tons. Meanwhile, Thailand, the third-largest sugar producer, is expected to increase output by 18% to 10.35 MMT in 2024/25.
Lower crude oil prices have also weighed on sugar markets, particularly in Brazil, where ethanol prices influence sugar demand.
Technically, analysts highlighted key support levels at 17.49 and 17.19 cents per pound, with resistance at 18.17 and 18.55 cents. Moving forward, weather conditions in Brazil, ethanol pricing trends, and policy decisions in major producing countries are expected to shape market dynamics.
(By Commoditiescontrol Bureau: 09820130172)
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