Mumbai, 02 Dec (Commoditiescontrol): Sugar prices ended the week on a bearish note, with March raw sugar futures on the Intercontinental Exchange (ICE) falling by 2.81% to settle at 21.08 cents per pound on Friday.
London December white sugar futures echoed the trend, declining $8.40 to close at $551.80 per metric ton. For the week, ICE raw sugar lost 3.2%, driven primarily by currency fluctuations and revised global supply estimates.
The Brazilian real's depreciation to a record low against the U.S. dollar spurred export sales from Brazilian sugar producers, encouraging long liquidation in sugar futures. This currency-driven shift weighed on market sentiment, alongside projections of lower short-term sugar production. S&P Global Commodity Insights estimated a 55.5% annual decline in sugar output from Brazil’s Center-South region during the first half of November, with production at 979,000 metric tons.
However, Datagro analysts offered a more optimistic outlook for Brazil’s sugar industry, forecasting a robust recovery in the 2025/26 season. Production is expected to reach between 42.0 and 43.2 million metric tons, reflecting long-term resilience despite current challenges.
The International Sugar Organization (ISO) added to the bearish sentiment by lowering its 2024/25 global sugar deficit forecast to 2.51 million metric tons, down from 3.58 million metric tons. Additionally, the ISO raised its surplus estimate for 2023/24 to 1.31 million metric tons, up from an earlier projection of 200,000 metric tons.
Despite downward price pressure, some factors offered limited support. Data from Unica revealed a significant 59.2% year-on-year drop in sugar output from Brazil's Center-South region during early November, with production totaling 898,000 metric tons. Weather risks also remain a concern, as excessive rainfall in key growing regions could hamper crop yields. Citi analysts maintained their three-month price target for raw sugar at 24 cents per pound and raised their 12-month forecast to 25 cents, reflecting cautious optimism.
Sugar prices are expected to remain volatile in the coming weeks as traders closely watch Brazil’s production recovery, global weather developments, and ethanol demand trends. Key technical levels for ICE raw sugar futures show support at 20.83 and 20.58 cents per pound, with resistance at 21.51 and 21.94 cents. These dynamics will likely shape the global sugar market in the months ahead.
(By Commoditiescontrol Bureau: 09820130172)
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