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ICE Raw Sugar Close Higher On Concerns Of Brazilian Sugar Supplies Disruption

2 Jun 2020 7:07 am
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Mumbai (Commodities Control) – Raw sugar futures on Monday closed higher on supply concerns as the spread of the coronavirus in Brazil may force sugar mills to close and disrupt the supply of sugar to ports. Brazil has now overtaken Spain and France with the fourth-most Covid-19 deaths globally at 29,314.

July raw sugar ​​settled up 9 cents, or 0.8%, at 11.00 cents per lb, amid some optimism (as well) as countries emerge from coronavirus lockdowns. August white sugar ​​settled up $2.60, or 0.7%, at $364.80 a tonne.

Dealers said that sugar's price upside is capped, however, because even at current price levels it remains far more profitable for cane mills in Brazil to produce sugar rather than ethanol, a cane-based biofuel.

Speculators trimmed their net short position in ICE raw sugar in the week to May 26 to 5,381 contracts.

India, a leading sugar producer, is likely to receive above-average monsoon rainfall for a second year running in 2020.

In a bearish factor, the USDA's Foreign Agricultural Service (FAS) last Wednesday forecast that India's 2020/21 sugar production will climb 17% y/y to 33.7 MMT. FAS also projected that India's 2020/21 sugar ending stocks would climb 8.8% y/y to 17.419 MMT. India's sugar production is expected to recover in 2020/21.

Support and Resistance for sugar #11 lies at 10.69 cents and 11.29 cents per lb, respectively.

(Commodities Control Bureau)

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