Forexpros – Sugar futures regained strength on Wednesday, re-approaching a three-week high as mounting fears over sugar crop conditions in Brazil and Thailand, the world’s two largest producers of the sweetener, buoyed prices.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.2616 a pound during European morning trade, climbing 0.83%.
It earlier rose by as much as 1.4% to trade at USD0.2634 a pound, the highest price since October 10, when prices rose to a three-week high of USD0.2662 a pound.
Concerns over Brazil’s sugar harvest intensified after ICAP do Brasil, the nation’s biggest sugar industry group said Tuesday that heavy rainfall in Brazil’s Center-South region, the largest sugar-growing area in the country, was expected to threaten sugar output and damage the quality of the harvest.
Juliano Ferreira, a researcher at the Sao Paulo-based company said, “Rains in Brazil may result in sugar production falling below 30 million tons, while yields could be reduced, but the major impact would be from mills ending operations for the season earlier due to rains.”
Brazil is the world’s largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.
Sugar futures found further support as Thailand’s worst flooding in nearly 50 years continued to weigh on sugar cane crops in the northern and central parts of the country.
Vibul Panitvong, executive chairman of the Thai Sugar Millers Corporation said the country was likely to delay cane crushing from an initial schedule of November 10, resulting in lower output from the world’s second largest exporter.
Meanwhile, sugar traders were awaiting Thursday’s report on Chinese sugar import and export figures for September to gauge the strength of demand in the world’s largest sugar consumer.
Elsewhere, on the Chicago Mercantile Exchange, wheat for December delivery slumped 0.38% to trade at USD6.5788 a bushel, corn for December delivery rose 0.69% to trade at USD6.4963 a bushel, while soybeans for November delivery dipped 0.17% to trade at USD12.3288 a bushel.
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