Sugar Futures Drop to Lowest Point in a Year
April 26 2017 - 3:12PM
Dow Jones News
By Carolyn Cui
Sugar prices fell to their lowest level in a year Wednesday on
signs of robust supplies and poor demand.
Raw sugar for May delivery tumbled 4.9% to settle at 15.38 cents
a pound on the ICE Futures U.S. exchange, the lowest level for the
front-month contract since Apr. 28, 2016.
In its latest forecast released on Wednesday, Brazil's
sugar-industry group Unica estimated farmers in the country's
center-south region would harvest 585 million metric tons of sugar
cane for the just-started 2017-2018 growing season. That would
represent a decline from the 607.14 million tons harvested and
processed in the 2016-2017 season.
"The numbers were a little lower than what everybody was
expecting, but still within a range that doesn't change much what
the market was considering," said Bruno Lima, head of sugar and
ethanol group in Brazil at INTL FCStone. The brokerage's forecast
for sugar-cane output was 588.8 million tons.
Brazil is the world's biggest producer and exporter of sugar,
and its center-south region grows about 90% of the country's
cane.
A day earlier, India, the world's largest sugar consumer, said
that declining sugar sales have left the country with enough stocks
until the next crop, suggesting that India would probably need no
more imports to help alleviate its tight supplies, according to the
Indian Sugar Mills Association.
Newswires reported on Wednesday that China was considering
imposing special import duties on sugar as part of antidumping
efforts, which could start as early as May. If approved, the
proposal would introduce a 45% duty this fiscal year, which could
significantly discourage sugar imports.
Sugar prices have been retreating in recent months, losing more
than 30% since early October, as a lack of fresh news drove many
speculators to unwind their bullish bets. The pullback came as a
disappointment to traders who were attracted to the sugar market
early this year betting on growing demand from India and China.
"I still think they will have to buy, especially India, because
the numbers don't close out," Mr. Lima said.
In other markets, cocoa for July added 1.2% to settle at $1,875
a ton, arabica coffee for July was down 1.3% to close at $1.3070 a
pound, frozen concentrated orange juice for July was up 1.7% to
settle at $1.5975 a pound, and July cotton added 0.04% to end at
79.39 cents a pound.
Write to Carolyn Cui at carolyn.cui@wsj.com
(END) Dow Jones Newswires
April 26, 2017 14:57 ET (18:57 GMT)
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