Forexpros – Sugar futures were sharply lower on Tuesday, retreating from a seven-day high after Pakistan approved the export of sugar for the first time in three years, while speculation India planned to raise its export quota also weighed.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.2416 a pound during European afternoon trade, tumbling 1.7%.
It earlier fell by as much as 1.95% to trade at a session low USD0.2409 a pound. On Monday, prices rose to a seven-day high of USD0.2458.
Sugar prices came under pressure after Pakistan’s Ministry of Commerce announced Monday that the country approved sugar exports for the first time since the 2009-10 marketing year, citing an expected surplus of more than 1 million tonnes in the current crop season.
“We expect the sugar surplus to be 1.5 million tonnes, given the current domestic consumption,” a Ministry of Commerce official said.
Meanwhile, sugar traders awaited the outcome of a meeting of Indian ministers later in the day, where market participants expected additional exports to be agreed.
Director-general of India’s Sugar Millers Association, Abinash Verma, said Monday that conditions are right for the approval of further Indian sugar exports by authorities.
India is the world’s second largest sugar producer, trailing only Brazil. It exported approximately 2.6 million tons of the sweetener in the 2010-11 marketing year.
Meanwhile, flooding in Australia has so far caused no major damage to the nation’s sugar crop, the head of the country’s main sugar exporter said earlier Tuesday.
Swiss lender Credit Suisse said in a report Monday that it expected sugar prices to average USD0.2400 a pound in the first quarter. “Essentially we’ve been trading sideways since December,” the bank said.
Agricultural traders continued to eye developments surrounding talks aimed at restructuring Greek debt. Greek Prime Minister Lucas Papademos was to meet with coalition leaders later in the day to discuss the implementation of additional fiscal measures needed to secure a second bailout, after failing to strike a deal on Monday.
European Union officials have said a final agreement on Greece’s EUR130 billion bailout much be approved by February 15, in order to avert a default when a EUR14.5 billion bond repayment comes due on March 20.
Elsewhere on the ICE Futures Exchange, cotton futures for March delivery dropped 1.43% to trade at USD0.9494 a pound, while Arabica coffee for March delivery fell 0.75% to trade at USD2.1790 a pound.
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