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ICE Raw Sugar Settles Just Beneath 2-Yr Peak On Global Supply Tightness

18 Jan 2020 7:48 am
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Mumbai (Commodities Control) –Raw sugar edged back towards the previous session's two-year peak.

March raw sugar settled up 0.1%, or 2 cents, to $14.45​​ cents per lb, having hit a two-year high of 14.58 cents on Thursday. The contract was up 2.7% on the week. March white sugar settled up 0.1%, or $0.50, to $395.10 per tonne, after touching a two-year high of $401.70 on Thursday.

Sugar prices have rallied sharply this week on the outlook for smaller global sugar supplies. Sugar prices found support on smaller sugar output in India, after Friday's data from India's Sugar Mills Association showed India sugar production from Oct 1-Jan 15 dropped 26% y/y to 10.89 MMT.

Unica on Tuesday reported that Brazil's Center-South sugar production in the second half of December plunged 82.4% y/y to 13,000 MT versus 73,000 MT in the same period last year, although 2019/20 Center-South sugar production through Dec is up 0.53% y/y at 26.481 MMT.

Even the Thai Sugar Millers Corp. is forecasting sugar production in Thailand, the world's fourth-largest sugar producer, will be less than 12 MMT this year, down more than 14% y/y from 14 MMT last year because of drought and low rainfall in Thailand's sugar-growing areas.

Analysts have been widening their sugar deficit forecasts for 2019/20, though there is a risk high prices could eventually prompt India to export its large surplus stocks and tempt Brazilian mills to produce more sugar at the expense of ethanol.

Dealers said the supply outlook for 2020/21 was growing bearish, with talk that Maharashtra mills could double their output next season with more favourable weather on the horizon.

In the short term, however, the market remains positive, with dealers largely viewing dips as buying opportunities.

Support and Resistance for Sugar#11 lies at 14.27 cents and 14.59 cents per lb, respectively.

(Commodities Control Bureau)


       
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