Mumbai, 14 Jun (Commoditiescontrol): ICE sugar futures soared to one-month highs on Thursday, driven by concerns over reduced sugar exports from India. The Indian government reaffirmed its commitment to boosting ethanol production, potentially curtailing sugar output and limiting exports, thus tightening global supplies.
The July raw sugar contract surged by 0.49 cents, or 2.57%, closing at 19.59 cents per pound. Similarly, the August ICE white sugar contract in London climbed by $12.60, or 2.27%, reaching $567.40 per metric ton.
This rally is underpinned by the International Sugar Organization's (ISO) recent revision of the global sugar deficit for 2023/24 to 2.95 million metric tons (MMT), up from a February estimate of 689,000 metric tons. The ISO also increased its global sugar demand forecast to 182.2 MMT, reflecting higher consumption in India.
In Brazil, dry weather has accelerated harvesting, although some mills underperformed. Despite this, Brazil’s overall sugar production outlook remains stable. India's sugar production has decreased by 1.6% year-over-year as of April 30, compounded by a slowing monsoon which may delay planting in key agricultural regions.
In Australia, industrial actions at mills were temporarily halted as unions pressed for better pay, impacting operations at the largest sugar producer.
Globally, sugar markets remain volatile with weather conditions in key producing regions such as Brazil and India influencing prices. Analysts from BMI project a 1.5% increase in global sugar production to 185.7 million tons for the 2024/25 season and a 0.5% rise in consumption to 179.7 million tons. The USDA forecasts record sugar production at 186 million metric tons for 2024/25, with demand reaching 178.8 million tons.
Meanwhile, speculative traders have reduced their net short positions, sparking a short-covering rally. Traders are closely watching technical support levels for the July sugar contract at 19.24 and 18.83 cents, with resistance expected at 19.86 and 20.07 cents.
As global production dynamics evolve and weather uncertainties persist, sugar prices are anticipated to remain volatile in the near term.
(By Commoditiescontrol Bureau: 09820130172)
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