Mumbai, 14 Dec (Commoditiescontrol): Sugar prices continued their downward trend on Friday, pressured by increased sugarcane crushing in Brazil, which signaled abundant global supplies. ICE raw sugar futures dropped to their lowest level in nearly three months, while London white sugar prices fell to a one-month low.
On the ICE exchange, March raw sugar futures declined by 0.17 cents, or 0.81%, to settle at 20.72 cents per pound, marking a weekly loss of 5%. Similarly, in London, December white sugar futures fell by $5.00 to close at $528 per metric ton.
Brazil's ramped-up sugarcane crushing has played a significant role in the price decline. Data from Unica revealed that Brazil processed 20.35 million metric tons (MMT) of sugarcane in the second half of November, surpassing market expectations of 15.5 MMT. This unexpected surge suggests Brazil's total crop output could exceed earlier estimates, easing concerns over global supply shortages.
Despite the recent price slump, analysts at Citi remain optimistic about sugar's long-term outlook. They predict potential risks to Brazil’s next crop and tighter global supplies could push prices higher, setting a three-month target of 24 cents per pound and a 12-month forecast of 25 cents per pound.
Global supply projections have added to the bearish pressure on prices. The International Sugar Organization (ISO) revised its 2024/25 global sugar deficit estimate to 2.51 MMT, down from an earlier forecast of 3.58 MMT. Additionally, the ISO raised its 2023/24 global sugar surplus projection to 1.31 MMT, up from just 200,000 metric tons.
Thailand's sugar production has also increased, further influencing the market. The country’s Office of the Cane and Sugar Board projects an 18% year-on-year rise in sugar output for the 2024/25 season, reaching 10.35 MMT.
Meanwhile, in India, sugar export restrictions remain a focus as the government prioritizes ethanol production. According to the Indian Sugar and Bio-energy Manufacturers Association (ISMA), sugar production from October to April during the 2023/24 season fell by 1.6% year-on-year to 31.4 MMT.
From a technical standpoint, sugar prices remain volatile. Analysts have identified support levels at 20.54 and 20.35 cents per pound, with resistance pegged at 20.94 and 21.15 cents. Market participants are closely watching weather patterns in Brazil, ethanol trends, and production updates from key sugar-producing regions for further direction.
(By Commoditiescontrol Bureau: 09820130172)
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