Mumbai, 13 Nov (Commoditiescontrol): Sugar snapped two straight week of gains by closing the recently concluded week lower on ample supplies from Brazil, the largest exporters, fuelled by favourable sugar cane harvesting conditions in the top region.
ICE raw sugar prices eased on Friday, retreating from near 12-year high, on an increase in sugar production in Brazil. Report By Unica showed surge in output in second half of October.
Last Tuesday, sugar prices rallied to 12-year highs on the outlook for tighter global sugar supplies. Further, congestion in Brazil's ports restricted sugar exports and hence a 10% drop from September.
ICE sugar futures for March delivery ended 0.49 cents or 1.8% lower at 27.29 cents per lb. For the week, it lost 1.7%. The front month hit a 12-year high of 28.14 cents on Tuesday.
December London white sugar settled down $9.30, or 1.2%, to $747.30 a tonne. For the week, the contract eased 1.4%.
Sugar production in centre-south Brazil in the second half of October totalled 2.35 million metric tons, up 9.4% from the same period last year, Brazil sugar industry group UNICA reported on Friday.
The market remains underpinned by the prospect of El Nino curbing production in India and Thailand while logistical bottlenecks are a concern in top exporter Brazil.
Dealers said, Thai sugar exports could face delays next year, producers and sellers of the sweetener said, after the government introduced new measures to protect domestic supply and prevent smuggling.
Egypt's state commodity buyer GASC is believed to have purchased around or over 100,000 metric tons of white refined sugar in an international tender which closed on Sunday, traders said on Monday.
In other news, India's sugar production is expected to fall while Thailand may impose restriction on sugar exports. The South-East Asian country reversing a 20% increase in domestic sugar prices after the commodity was classified as a controlled good has further exerted pressure.
There's likelihood of India curbing sugar exports.
Thailand's deputy commerce minister said the country would categorize sugar as a controlled commodity in an attempt to control inflation and maintain food security, which would require a regulating panel to approve Thailand's sugar exports of a ton or more.
Last month, the International Sugar Organization (ISO) released a global sugar production (Oct-Sep 2023/24) forecast showing a fall of 1.2% on year to 174.8 MMT, while predicting a global sugar deficit of 2.1 MMT. The latest report tip-toed Sep 5th prediction of Alvean, the world's largest sugar trader, estimation of global sugar deficit in 2023/24 at 5.4 MMT, the sixth year of shortages. Alvean attributed sugar shortage to India restricting sugar exports and drought impacting Thailand's sugar output. India's sugar output is likely to fall 8% in 2023/24.
Indonesia's white sugar output is seen down 4% this year at around 2.3 million metric tons as dry weather hits harvests.
Funds reduced their bullish bets in raw sugar futures during the week to Oct 31, the data from from the Commodity Futures Trading Commission (CFTC) showed on Friday. Funds cut 15,579 contracts to their net long position in raw sugar, taking it to 114,980 lots in the period.
As against previous observation, the Sugar output fears have ebbed a bit due to UNICA report. Brazil's top sugar cane producing region is seeing a pick-up in harvest due to improvement in weather conditions. However, drought conditions in the growing region such as Thailand has forced analysts to readjust their production estimates and the availability of the sweetener during the busy season. However, with ample supplies from Brazil and India, there is possibility of supply strain easing further. Overall, the bullish price pattern remains unaltered though funds have decided to cut their long position. A clarity on production in necessary before taking a fresh bet.
For Monday, support for the March Sugar contract is at 27.04 cents and 26.78 cents, with resistance at 27.71 cents and 28.12 cents.
(By Commoditiescontrol Bureau: 09820130172)
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