Forexpros – Sugar futures fell to the lowest level since early June on Thursday, as sugar production in top grower Brazil was forecast to rise to a record next year, underlining the view that global supplies are ample.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.2316 a pound during European afternoon trade, tumbling 1.1%.
It earlier fell by as much as 1.5% to trade at USD0.2302 a pound, the lowest since June 2.
According to Copersucar, Brazil’s largest sugar trading group, sugar production in the country’s Center South region was forecast to rise to a record-high 34 million metric tons in the 2011-12 marketing season, as farmers in the region boosted sugarcane plantings.
The region, which accounts for approximately 90% of Brazil’s sugar, produced 30.8 million tons a year earlier.
Copersucar Chairman Luis Pogetti said, “We have seen not only an increase in planting but also replanting. I don’t understand why people have been so pessimistic about the size of next year’s crop.”
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.
The upbeat crop forecast comes a day after India approved an additional one million tonnes of sugar exports in the 2011-12 marketing season.
The increase in exports will bring total Indian sugar shipments to a four-year high, underlining the view that global supplies are ample.
India is the world’s second largest sugar producer. It exported approximately 2.6 million tons of the sweetener in the 2010-11 marketing year.
Sugar prices have declined in seven of the last nine trading sessions and have lost nearly 8% since the beginning of November, as increasing competition for U.S. exports has been dominating sentiment in recent weeks.
Elsewhere on the ICE Futures Exchange, cotton futures for March delivery shed 0.5% to trade at USD0.9067 a pound, while Arabica coffee for March delivery fell 0.63% to trade at USD2.3510 a pound.
Forexpros
