Sugar Futures Edge Lower
March 28 2017 - 11:31AM
Dow Jones News
By Carolyn Cui
Sugar futures edged lower Tuesday, even as speculation on a
change in India's imports policy seemed to be gathering momentum
again.
Raw sugar for May delivery fell 0.5% to 17.62 cents a pound on
the ICE Futures U.S. exchange.
Early this year, the sugar market had seen an influx of new
participants attracted by rising sugar prices and a 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 weeks, hopes dimmed for Indian imports as the
India Sugar Mills Association lowered its estimate for consumption,
leading some traders to question whether the government could fill
the gap by tapping into the nation's sugar reserves. Some traders
began to bet on prices falling in recent days. Sugar prices fell to
their lowest levels in 10 months last week.
"India news and gossip concerning 'will they won't they' seems
to be rising in decibels," wrote Tom Kujawa, co-head of softs
department at Sucden Financial Ltd., in a note to clients on
Tuesday.
Some market participants now expect the Indian government to
reduce import duty, encourage imports directly, or come up with
some other mechanism by asking the mills to start in September and
build up domestic stocks quickly, he added.
Analysts expect sugar prices to become volatile again as the
financial year ends on Friday and May contract expires soon.
In other markets, cocoa for May fell 0.6% to $2,137 a ton,
arabica coffee for May dropped 0.7% to $1.3825 a pound, frozen
concentrated orange juice for May was down 1.6% to $1.7215 a pound,
and May cotton fell 0.2% to 76.79 cents a pound.
Write to Carolyn Cui at carolyn.cui@wsj.com
(END) Dow Jones Newswires
March 28, 2017 11:16 ET (15:16 GMT)
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