Mumbai, 21 Oct (Commoditiescontrol): Sugar prices continued to decline throughout the week ending October 18, as broader agricultural commodities faced pressure from a stronger U.S. dollar and weak global demand. Despite these challenges, sugar managed a modest rebound by Friday, supported by a softer dollar, which triggered short covering in the sugar futures market. March raw sugar futures rose by 0.02 cents, or 0.09%, to close at 22.18 cents per pound, recovering slightly from last week’s 3.3% drop. In London, December white sugar futures added $0.90, or 0.16%, to finish at $566.60 per ton.
Brazil's weather remains a central market factor, with forecasts of heavy rains next week in the Center-South region expected to boost soil moisture and enhance sugarcane yields. However, uncertainties about production linger due to the ongoing La Niña weather pattern. Earlier in the week, Wilmar International reduced its 2024/25 production estimate for Brazil’s Center-South region to 38.2-39.5 million metric tons (MMT), citing high temperatures and low rainfall.
Brazil’s sugarcane industry group Unica reported a 16.2% year-on-year decline in sugar production for late September, at 2.829 MMT. Rabobank also revised its production estimate lower, trimming it by 1 MMT to 39.3 MMT. Brazil’s crop agency Conab similarly reduced its forecast from 42.7 MMT to 42 MMT.
Globally, France is expecting a slight decline in sugar beet production, while the USDA forecasts record sugar output for the U.S. India, on the other hand, is projecting a strong harvest due to favorable monsoon conditions. Brazil’s sugar exports saw a 23% surge in September, helping lift the United Nations’ global food price index.
In other regions, Indonesia is considering implementing a sugar import levy to support its bioethanol program, and Germany anticipates a 17% rise in refined sugar production. Meanwhile, Russia foresees a 10% decline in sugar output due to poor weather but plans to export 600,000 tons after lifting its export ban.
Technically, traders are eyeing key support levels at 21.97 and 21.77 cents per pound, with resistance at 22.51 and 22.85 cents per pound.
Despite a slight recovery in prices on Friday, sugar futures have faced continued pressure throughout the week due to weaker global demand and weather-related uncertainties in key producing regions. While the market remains sensitive to external factors like currency fluctuations and weather, traders will be closely monitoring production forecasts and export dynamics in the weeks ahead.
(By Commoditiescontrol Bureau: 09820130172)
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