Forexpros – Sugar futures were range bound on Tuesday, steadying after the previous day’s sharp losses, following India’s decision to approve a further 1 million tonnes of exports of the sweetener.
On the ICE Futures U.S. Exchange, sugar futures for May delivery traded at USD0.2480 a pound during European afternoon trade, easing up 0.08%.
The May contract traded between a range of USD0.2495, the daily high and USD0.2448, the session low and the lowest since March 15.
Sugar prices tumbled nearly 3% on Monday after India allowed another 1 million tonnes of unrestricted white sugar exports in the 2011-12 marketing season, bringing the total approved so far to 3 million tonnes.
India’s Trade Minister Anand Sharma confirmed the amount, which is considered significant enough to have an impact on the sugar market, even though it is small by comparison with leading exporter Brazil’s 26.5 million tonnes of raw and refined exports in 2011.
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.
Meanwhile, sugar traders continued to monitor sugar cane crop conditions in Brazil, with the upcoming cane harvest of the nation’s prime center-south region due to begin next month.
Agricultural meteorologists said that rains over Brazil’s main sugar state, Sao Paulo, should turn more frequent through mid-April, bringing relief to drought-stricken fields.
Crops in the Brazil’s Center South-region produce nearly 90% of the nation’s sugar and ethanol.
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.
Market participants noted that prices remain vulnerable to further downside moves in the near-term due to expectations for a big global sugar surplus, driven by increased production in India and Thailand.
Thailand’s state-owned Thai Cane & Sugar Corporation sold a total of 79,334 metric tons of sugar to international trading firms in a tender Monday, a senior TCSC official said.
Elsewhere on the ICE Futures Exchange, cotton futures for May delivery rose 0.73% to trade at USD0.9157 a pound, while Arabica coffee for May delivery jumped 1.4% to trade at USD1.8143 a pound.
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