By Carolyn Cui

Sugar continued its downward slide on Tuesday, as traders turned bearish amid a dearth of fresh bullish news.

Raw sugar for May delivery tumbled 3% to 17.17 cents a pound on the ICE Futures U.S. exchange, the lowest level since last May.

The pullback in sugar prices came as a disappointment for many traders, who were attracted early in the year by the sweetener's rising prices and bullish outlook, especially expectations for a surge in India's imports.

"But all the bullish news that hung over the market have not yet materialized," said Bruno Lima, head of sugar and ethanol at INTL FCStone, in a note to clients.

While many analysts still expect India, one of the world's largest sugar consumers, to lower its tariff and allow more imports, "the window for a rebound in sugar prices is narrowing," said Citigroup analysts in a research note published on Tuesday.

"Once the Brazilian harvest kicks in to high gear in late summer, we see little room for renewed strength in sugar prices, absent any weather surprises," they said.

As a result, Citigroup lowered its price target for 2017 to 19.5 cents a pound, down from 20.5 cents.

Early this year, the sugar market had seen an influx of new participants, who were attracted by rising sugar prices and bullish outlook for commodities in general. In particular, many believed that a fall in India's production would eventually force the government to lower import tariffs and allow more imports, boosting global sugar prices.

But in recent days, hopes dimmed for Indian imports as the India Sugar Mills Association lowered its estimate for consumption, a move that led some traders to question whether the government could fill the gap by tapping into the sugar reserves the nation holds. That has triggered an exodus of speculators who had been betting on higher sugar prices based on the idea of Indian imports.

In other markets, cocoa for May added 1.3% to $2,144 a ton, arabica coffee for May skidded 0.4% to $1.4475 a pound, frozen concentrated orange juice for May was up 1.4% to $1.8540 a pound, and May cotton fell 0.5% to 76.93 cents a pound.

Write to Carolyn Cui at carolyn.cui@wsj.com

(END) Dow Jones Newswires

March 21, 2017 11:10 ET (15:10 GMT)

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