Raw sugar futures rebound as Brazilian currency stabilises; rain and tight Indian stocks support prices
Raw sugar futures on ICE rebounded 0.8% to 19.20 cents per pound on Tuesday after plunging 5.6% in the previous session. Stabilising Brazil’s real, rain-related crushing disruptions and tightening Indian supplies ahead of festive demand are supporting expectations of a market recovery.
London: Raw sugar futures recovered on Tuesday, gaining 0.8% after plunging 5.6% in the previous session, as market fundamentals regained attention following the sharp sell-off triggered by Brazil’s presidential election outcome, Business Recorder reported.
Raw sugar futures on the Intercontinental Exchange (ICE), a global benchmark, settled 0.10 cent higher at 19.20 cents per pound on Tuesday, recovering part of the previous session’s losses.
The initial decline followed the victory of Luiz Inacio Lula da Silva in Brazil’s presidential election, which triggered a fall in the Brazilian real. A weaker currency makes dollar-denominated sugar exports more attractive to Brazilian mills and exporters by increasing their returns in local currency terms.
However, the real subsequently stabilised, allowing market participants to refocus on supply and demand fundamentals.
Rain-related disruptions to sugarcane crushing in Brazil and tightening domestic supplies in India are providing support to global sugar prices.
Physical sugar broker Deepcore said persistent rainfall in Brazil was reducing available crushing days, while India was entering its peak festive demand period with relatively low stocks. Domestic sugar prices were also approaching import parity levels.
The broker expects these factors to support a recovery in the international sugar market.
Brazil’s crushing disruptions could constrain near-term sugar availability, while stronger domestic demand in India could further tighten the supply outlook and lend support to prices.
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Source : ChiniMandi
