Mumbai, 12 Apr (Commoditiescontrol): ICE raw sugar futures ended lower on Thursday, due to bearish carryover from last week's increased sugar production outlook. The forecast helped tame the investor nerve.
However, firm tone in crude oil prices helped keep floor under sugar prices. Higher oil prices prompts diversion of cane crushing for ethanol and thus curbing sugar supplies.
ICE sugar futures for May delivery settled down 0.61 cents or 2.8% at 20.85 cents per lb after slumping to a one-month low of 20.81 cents. Prices lost 2.4% last week.
May London ICE white sugar contract fell $4.40 or 0.7% at $628.10 a metric ton, coming off 1-month high recorded in the previous week. The contract eased 0.9% during the just ended week.
Dealers said forecasts for a normal monsoon in India this year had added to the bearish mood.
Brazil's industry group UNICA will release production data for second half of March on Friday at 1500 GMT.
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.
On Tuesday, 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.
Meanwhile, the weather has dried up in Brazil's Centre-South region after the rains last week, so more mills are likely to start their sugarcane processing operations for the season.
"Brazil may have a strong early harvest, which may be bearish in the short term, but harvested cane volumes may disappoint later in the year," Rabobank said in a report.
Brazil's sugar mills have ramped up their cane crushing for more sugar and less ethanol. Mills have crushed 48.96% of total cane for sugar production this year, up from 45.93% 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 5,465 contracts to their net long position in raw sugar to 8,011 lots.
For Friday, support for the Jul Sugar contract is at 20.29 cents and 20.04 cents, with resistance at 20.99 cents and 21.44 cents.
(By Commoditiescontrol Bureau: 09820130172)
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