Mumbai, 29 Mar (Commoditiescontrol): ICE raw sugar futures settled higher on Thursday, led by surge in crude oil price and carryover support from US sugar producers call for reduced sugar imports from Mexico.
ICE sugar futures for May delivery settled up 0.33 cents or 1.5% at 22.52 cents per lb. Prices lost 1.2% last week.
May London white sugar contract gained $6.90 or 1.1% at $652.50 a metric ton, coming off 1-month high recorded in the previous week. The contract added 2.5% during just ended week.
Dealers said recent rainfall appeared to have improved the outlook for Brazil's 2024/25 cane crop, although some concerns about dry conditions remained.
In the previous session sugar price eased as world's largest exporter Brazil reported higher sugar production. Unica reported that Brazil's Center-South sugar output in the first half of March was 64,000 MT, up 313% from the same time last year. Also, Brazilian sugar output so far in the 2023-24 marketing year through mid-March is up 25.8% on year to 42.245 MMT.
"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.
Earlier this week, sugar gained support as US producers called for a reduction in sugar imports from Mexico. The American Sugar Coalition wants the government to lower the amount of sugar Mexico can send to the US by 44%, which would likely boost prices and require the US to purchase sugar from other countries, tapping already tight global sugar supplies.
ASR Group, the largest sugar company in the United States, has six to eight weeks of raw sugar stocks at its Baltimore sugar refinery, which is supplied by vessels coming to the Port of Baltimore. The port is blocked after the collapse of a bridge. The Baltimore refinery is one of the largest plants in the country, producing 6 million pounds of refined sugar per day.
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.
Fitch report contradicts a recent forecast by India's trade body that suggested improvement in country's sugarcane production. The Indian Sugar and Bioenergy Manufacturers Association Wednesday raised its forecast for India's sugarcane production in the 2023-24 marketing year (that began on Oct 1) by 2.9% to 34 MMT from January's forecast of 33.05 MMT. Higher sugarcane production likely means higher refined sugar production, depending on how much of that sugarcane is converted into ethanol.
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.
Global financial markets are shut today i.e. Friday.
For Monday, support for the May Sugar contract is at 22.19 cents and 21.86 cents, with resistance at 22.72 cents and 22.92 cents.
(By Commoditiescontrol Bureau: 09820130172)
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