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ICE Raw Sugar Ends Higher Tracking Bounce Back In Crude Oil Prices

3 Apr 2020 7:49 am
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Mumbai (Commodities Control) – Raw sugar prices on ICE closed up on Thursday as crude oil futures surged. May raw sugar ​​settled up 25 cents, or 2.5%, at 10.29 cents per lb, going up with the surge in oil prices. While May white sugar ​​settled down $1.40, or 0.4%, at $340.60 a tonne.

Crude futures jumped 20%, heading away from Wednesday's near 18-year lows, after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal to end their price war. The surge in crude oil sparked short-covering in sugar futures.

The surge in oil prices is bullish for ethanol prices and may encourage Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar production, thus reducing sugar supplies.

Although higher energy prices support raw sugar, the outlook continues to remain grim with the death toll from coronavirus continuing to rise and economic pain deepening. Even weakness in the Brazilian real against the dollar is a major bearish factor for sugar prices.

The Real on Thursday fell 0.48% against the dollar and posted a new record low of 5.2837 reals/USD.

According to market participants, this rally in raw sugar may be short-lived.Support and Resistance for Sugar #11 lies at 9.59 cents and 11.21 cents, respectively.

(Commodities Control Bureau)

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