New York: Raw sugar futures on ICE plummeted to an 18-month low on Thursday, driven by significantly higher production levels in Centre-South Brazil, which have far exceeded last season’s pace.
July raw sugar SBc1 fell by 0.32 cents, or 1.7%, closing at 18.33 cents per pound after setting an 18-month low of 17.95 cents earlier in the session. Market dealers pointed to the robust start of the harvest in Centre-South Brazil as a major bearish influence on prices.
On Wednesday, UNICA, the sugar industry group, reported that sugar production in the Centre-South region totalled 1.84 million tons in the latter half of April, marking an 84.25% increase compared to the same period last year. However, UNICA noted that the rise was partly due to drier conditions and warned that the production surge might not be sustainable throughout the remainder of the season.
In related market movements, August white sugar LSUc1 declined by 1.1%, settling at $536.20 per metric ton.
Meanwhile, Australia’s largest sugar producer, Wilmar Sugar, announced on Thursday that strikes by its employees would delay the start of cane processing, adding another layer of complexity to the global sugar market.
