Mumbai, 19 Apr (Commoditiescontrol): ICE raw sugar futures ended higher on Thursday, snapping their recent streak of decline, after commodities research firm Conab reduced Brazilian sugar output estimate. It is the first research firm to come out with reduced production forecast in the recent times.
Earlier Unica report suggested strong improvement in Brazil's sugar output. Similar tone echoed in industry estimates. Stronger-than-expected sugar production in India and Thailand have put the market on the defensive.
ICE sugar futures for May delivery settled up 0.27 cents or 1.4% at 19.59 cents per lb, after slumping to the lowest price since late December in the previous session. It lost 7% for the week.
May London ICE white sugar contract rose $9.60 or 1.7% at $608.90 a metric ton, coming off 12-month low recorded in the previous session. The contract ended the week 2.75% softer.
A total of 313,950 tons of white sugar have been tendered against the May contract on ICE Futures Europe, exchange data showed on Tuesday.
Sugar has been hit recently by ideas of better supplies from Asia and Brazil, but dealers said the fall attracted some bargain buying on Thursday.
Conab cut its Brazil 2023/24 sugar production estimate by 2.6% to 45.7 MMT from a November estimate of 46.9 MMT. Brazil sugar production estimate was reduced since Conab raised its Brazil 2023/24 ethanol production estimate to 29.7 bln liters from a November estimate of 28 billion liters.
Recent rain in Brazil led the improved outlook for cane production in the 2024/25 season and a weakening of the Brazilian currency is likely boosting selling by mills there. Brazil's real hit a one-year low on Tuesday.
While robust sugar output in Brazil undercut prices, weaker Brazilian Real encourages exports. The natural sweetener was already under pressure due to the bearish carryover from last week's increased sugar production outlook.
Brazil's Center-South sugar output in the second half of March was 183,000 MT, up 9% from last year. Brazil's center-south sugarcane crushing totalled 5.04 million metric tons in the second half of March, data from industry group UNICA showed, up 6.5% from a year ago.
Brazil's sugar mills have ramped up their cane crushing for more sugar and less ethanol. Mills have crushed 48.87% of total cane for sugar production this year, up from 45.86% last year.
Last week, Vietnam's Office of the Cane and Sugar Board reported that Thailand's 2023/24 sugar production from Dec-Mar was 8.75 MMT, above a Feb estimate from the Thai Sugar Millers Corp for sugar production of 7.5 MMT.
Earlier, the Indian Sugar and Bioenergy Manufacturers Association reported that India's 2023/24 sugar production from Oct-Mar rose 0.4% on year to 30.2 MMT as more sugar mills stayed open to crush sugarcane. As of March 31, 322 Indian sugar mills had closed operations, compared with 346 mills that were closed at the same time last year.
Egypt on Monday extended the deadline for offers in its latest tender for 50,000 metric tons of raw cane sugar to March 30 from March 23.
Last week, Fitch Solutions report suggested that the decreased sugarcane plantings in key Indian states, alongside an anticipated reduction in Brazil's centre-south region production for the 2024/25 season, are supporting sugar prices. It added, however, that current strong production out of Brazil is capping sugar's gains.
Commodity Futures Trading Commission (CFTC) data on showed speculators have reduced 11,669 contracts to their net long position in raw sugar to 26,860 lots.
For Friday, support for the Jul Sugar contract is at 19.26 cents and 18.99 cents, with resistance at 19.76 cents and 19.99 cents.
(By Commoditiescontrol Bureau: 09820130172)
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