Mumbai, 20 May (Commoditiescontrol): After a previous week marked by a tug-of-war between bulls and bears, sugar prices remained flat. However, bears gained the upper hand in the week ending May 17th, bolstered by rising production in Brazil. This development encouraged traders to strengthen their short positions, signaling further downside for sugar in the coming days.
Sugar futures on the Intercontinental Exchange (ICE) continued their decline on Friday, staying above Thursday's 18-month low amid expectations of ample global supplies. The July delivery of raw sugar fell by 0.20 cents, or 1.09%, closing at 18.13 cents per pound after dipping to 17.95 cents on Thursday. The contract has decreased by 6% this week. In London, the August ICE white sugar contract also dropped, losing $1.50, or 0.28%, to close at $534.70 per metric ton.
The market's bearish sentiment is primarily driven by the strong start of the sugar harvest in Centre-South Brazil. According to the sugar industry group UNICA, production in this region reached 1.84 million tons in the second half of April, an 84.25% increase from the same period last year. This surge is partly attributed to drier conditions, which might not persist later in the season.
Complicating the market dynamics, Australia's largest sugar producer, Wilmar Sugar, announced that strikes by its employees would delay the start of cane processing. Conversely, projections from StoneX and S&P Global Commodity Insights indicate significant growth in Brazil's sugar output, estimating the 2024/25 production at 42.3 million tons.
Globally, the sugar market is witnessing shifts in production. Datagro forecasts a modest global surplus of 1.62 million metric tons for the 2024/25 season, reversing the previous season's deficit. This shift is driven by recovering production in Thailand and increased output forecasts from China. Conversely, in India, the Indian Sugar and Bioenergy Manufacturers Association reported a 1.6% year-over-year decrease in sugar production as of April 30, complicating the global supply outlook.
Speculators increased their bearish bets on ICE U.S. raw sugar futures in the week to May 14, according to the Commodity Futures Trading Commission (CFTC). Funds raised their net short position in raw sugar by 13,919 lots to 58,274.
Traders are closely monitoring these developments, with technical support for the July sugar contract seen at 17.98 and 17.82 cents, and resistance at 18.37 and 18.60 cents.
With rising Brazilian production and shifting global supply dynamics, sugar prices are poised for continued volatility, prompting traders to closely watch weather conditions and production reports.
(By Commoditiescontrol Bureau: 09820130172)
0 Comments 
Post Comment 
