MUMBAI, 25 Jan (Commoditiescontrol):The latest Commitments of Traders (COT) report for Sugar No. 11 reveals a sharp increase in bearish sentiment among speculative traders. This shift was initially driven by India’s announcement to allow sugar exports, but the subsequent inability to finalize contracts has tempered market expectations.
COT Report Insights
For the week ending January 21, 2025, Managed Money positioning underwent significant changes:
Short Positions: Increased by +29.43% week-over-week to 174,571 contracts.
Long Positions: Declined by -8.53%, totaling 122,905 contracts.
Net Position: Plunged from -502 to -51,666 contracts, signaling a strong bearish outlook.
Spreading Positions: Fell by -4.79% to 131,066 contracts.
The initial bearish sentiment stemmed from India’s announcement on January 20, 2025, permitting the export of 1 million tons of sugar. However, high domestic sugar prices, trading at a significant premium to global prices, rendered these exports unviable. Indian exporters’ inability to secure contracts due to uncompetitive pricing mitigated the anticipated bearish impact on global markets.
Market Implications
Bearish Momentum from Export News: Speculative traders increased short positions in anticipation of a supply surge following India’s export approval.
Export Failure Eases Pressure: The inability of Indian mills to secure contracts has limited the bearish impact, as no additional supply has entered global markets.
Potential for Short Covering: If Indian exports continue to face price-related challenges, Managed Money may reduce short positions, providing stability to global sugar prices.
Outlook
Key factors to monitor in the coming weeks include:
Indian Pricing Strategy: Whether Indian mills lower their offer prices to align with global market levels.
Global Price Trends: A significant rise in global prices could narrow the price gap and make Indian exports viable.
Speculative Positioning: A shift from short to long positions may signal market stabilization.
The sugar market remains in a delicate balance, with India’s export feasibility and global price movements likely to dictate the next phase of market sentiment.
(By Commoditiescontrol Bureau; +91 98201 30172)
(By Commoditiescontrol Bureau; +91 98201 30172)
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