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ICE Raw Sugar Gains On Global Supply Concerns; ISMA Reports Steep Decline In Output

19 Feb 2020 8:20 am
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Mumbai (Commodities Control) –Raw sugar headed back towards last week's 2-1/2 year peak. Sugar prices rallied Tuesday on signs of tighter global sugar supplies.

March raw sugar settled up 22 points at 15.28 cents per lb, having hit a 2-1/2 year high of 15.90 cents last Wednesday before losing some ground, while May raw Sugar upped 32 points to settle at 14.87 cents/lb. May white sugar settled up $7.3, or 1.78%, at $416.8 per tonne.

The India Sugar Trade Association (ISMA) reported Tuesday that sugar production in India, the world's second-largest sugar producer, dropped sharply by 23% y/y to 16.99 MMT during Oct 1-Feb 15.

Also, The Thai Sugar Millers Corp said Feb 7 that Thailand's 2019/20 sugar production might drop 35% y/y to 9 MMT from 14 MMT in 2018/19 as dry conditions reduce sugarcane yields.

However, dealers noted that top producer Brazil, from around April, could increase its sugar production at the expense of ethanol, which appears now to be fetching less money than the sweetener. They added, however, that until then, sugar prices should remain well supported.

A plus on global supply side is the likelihood of India's sugar exports to jump by nearly a third from a year ago to more than 5 million tonnes in 2019/20 as a rally in global sugar prices makes exports attractive, a leading trade body said.

London-based sugar trader Czarnikow said in a note to clients on Tuesday that Indian new-crop sugar is financially viable for exports, both raw and white, considering current benchmark price levels.

Support and Resistance for Sugar #11 lies at 14.44 cents and 15.12 cents/lb, respectively.

(Commodities Control Bureau)


       
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