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ICE Raw Sugar Manages Higher Settlement On Short Covering

21 Mar 2020 8:09 am
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Mumbai (Commodities Control) – Sugar prices on Friday pushed higher as rally in the Brazilian real sparked some fund short-covering in sugar futures. The Brazilian Real rose 2.07% against the dollar Friday as it recovers further from Wednesday's record low of 5.2523 reals/USD. The stronger real discourages export selling by Brazil's sugar producers.

May raw sugar ​​settled up 32 cents or 3% at 10.91 cents per lb, having hit its lowest since September 2018 on Thursday. May white sugar gained $6.50 to $344.40 a tonne, having hit its lowest since last November on Thursday.

A dealer said that sugar would continue to rise in the short term, given that it is massively oversold, though a sustained rally is unlikely given the macroeconomic uncertainty.

Line-up data from India and Brazil show strong exporting volumes, sugar trader Czarnikow said.

Higher offtake linked to household usage was also noted.

However, Raw sugar futures have lost 30% of their value from a 2-1/2 year peak of 15.78 cents reached on February 12 to Friday's close of 10.91 cents.

The prospect of lower energy prices hurting ethanol sales in Brazil and pushing mills there to shift production massively from the biofuel to sugar is a major factor in that price slump, according to traders and analysts.

Support and Resistance for Sugar #11 lies at 10.60 cents and 11.34 cents, respectively.

(Commsodities Contro, Bureau)


       
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