Mumbai, 04 Nov (Commoditiescontrol): As commodities markets adjust to the uncertainty surrounding the U.S. presidential election, sugar has managed to rally, driven by fundamental buying and tightening supplies. Raw sugar futures on ICE continued their advance on Friday, pushing higher over the week despite an increase in production from Brazil's Center-South region, a major sugar-producing area that could act as a bearish factor.
March raw sugar futures on ICE edged up 0.4% to 22.83 cents per pound, after reaching a three-week high of 23 cents, and closed the week with a gain of 3.2%. London’s December white sugar also rose, adding 0.75% to $580.80 per metric ton. Analysts noted that tightening sugar stocks make the market vulnerable to price hikes if any production issues arise in key growing regions.
Brazilian industry group Unica reported that early October sugar output increased by 8% year-over-year to 2.443 million metric tons, with cumulative seasonal production up 1.9% at 35.591 million tons. Despite this, traders are watching closely to see if production levels will ease, as current output ranks among the highest on record.
Weather concerns add further uncertainty. Wilmar International has warned of potential sugar shortages in early 2025 due to low stocks and reduced cane growth from drought. Meanwhile, Climatempo, a Brazilian weather service, forecasts significant rainfall for the Center-South region starting Friday, which could improve soil conditions and support crop yields.
In September, Brazil's sugar exports surged by 23%, contributing to inflationary pressures in global food markets. McDougall Global View highlighted that a high sugar mix of 48.7% could further influence the market. Technical indicators suggest support levels for ICE raw sugar at 21.69 and 21.32 cents, with resistance at 22.72 and 23.38 cents. While high Brazilian production and favorable weather might limit price increases, strong demand and low inventories could sustain prices into early 2025, keeping the market's future direction uncertain.
(By Commoditiescontrol Bureau: 09820130172)
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