5 days ago
Sugar Steadies After Hitting Four-Year Low on India Crop Outlook
(Bloomberg) -- Raw sugar wavered after hitting the lowest in almost four years in New York, as traders see improving supply prospects while buyers are taking opportunity to close deals at low prices.
The most-active futures contract pared losses after falling as much as 1.3% on Tuesday to 16.66 cents per pound, the lowest since June 2021. Prices are down nearly 13% this year on improved supplies, with expectations for a global surplus in the 2025-26 season.
'There has been demand down near 17 cents per pound and below,' said Michael McDougall, an analyst at McDougall Global View. Still, he pointed to buyers choosing the moments to close deals, as a favorable weather outlook at top producers weighs on prices.
Second-largest grower India will likely see gross production jump due to more plantings in key growing areas and favorable monsoon rains. More output in India could bolster changes for exports after the government had allowed overseas shipments of 1 million tons in the 2024-25 season.
Meanwhile, mills at top exporter Brazil are seen continuing to maximize sugar production at the expense of ethanol. Earlier data on the country's harvest already showed a high sugar mix, which is the percentage of cane used to make sweetener. Now, a decline in gasoline prices is set to affect the biofuels market, as most cars in the country are able to run on any mix of gasoline or ethanol.
'The market continues to be attentive to the pace of the Brazilian harvest and the dynamics of external demand, which has yet to show more consistent signs of recovery,' Bruno Zaneti, StoneX senior risk management consultant, said in a Tuesday note.
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