Sugar Futures Up as Brazil Production Falls
March 24 2017 - 11:22AM
Dow Jones News
By Carolyn Cui
Sugar futures rose Friday, as an industry group said that
Brazilian sugar production fell in the first half of March from a
year earlier.
Raw sugar for May delivery added 1.1% to 17.80 cents a pound on
the ICE Futures U.S. exchange.
According to Unica, center-south mills in Brazil crushed 3.3
million metric tons of cane during the first fortnight in March, a
decrease of 38.4% from the same period a year earlier.
During the period, they produced 73,000 tons of sugar, down
48.3%, and made 161 million liters of ethanol, a decline of
28.3%.
Friday's Unica report lent some support to the sugar market
which has lately been weighed down by a lack of fresh bullish news,
triggering an exodus of speculators who were attracted early in the
year by rising prices and a bullish outlook.
Brazil is the world's biggest sugar producer and exporter, and
the center-south grows about 90% of the country's cane. The
harvesting and crushing season is approaching its end, and the
production figures are more volatile than during the height of the
season because the quantities processed are much smaller.
Still, analysts are skeptical whether sugar prices have much
room to go higher if India, one of the world's largest sugar
consumers, keeps its tariffs high to prevent imports.
"The window for a rebound in sugar prices is narrowing," said
Citigroup analysts in a research note published this week. "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, from 20.5 cents.
In other markets, cocoa for May fell 1% to $2,155 a ton, arabica
coffee for May skidded 1.9% to $1.3785 a pound, frozen concentrated
orange juice for May was down 3.2% to $1.7920 a pound, and May
cotton rose 1% to 78.04 cents a pound.
Write to Carolyn Cui at carolyn.cui@wsj.com
(END) Dow Jones Newswires
March 24, 2017 11:07 ET (15:07 GMT)
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