Raw sugar futures on ICE reached their highest level in nearly seven months on Friday, driven by speculators eager to buy after key technical trade levels were surpassed, amid growing concerns about supplies in Brazil.
October raw sugar SBc1 increased by 2.2% to 22.42 cents per pound, peaking at 23.13 cents.
According to the Reuters, Stephen Geldart, associate director of broker and supply chain services provider Czarnikow said, “Prices (are) now above all key technical indicators (and) speculators have plenty of room to push the market higher,” noted Stephen Geldart, associate director at broker and supply chain services provider Czarnikow.”
He highlighted that most analysts expect sugar to be in short supply during the first quarter of next year, suggesting that this week’s market movements could pave the way for a year-end rally toward 24 cents.
Trader Wilmar revised its forecast for Brazil’s center-south sugar production down to between 38.8 million and 40.8 million metric tonnes, down from an initial estimate of 42 million tons.
As per report, government data indicates that Brazil is experiencing its worst drought on record.
