Sugar prices fell to their lowest level in a year Wednesday on signs of robust supplies and poor demand.
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Raw sugar for May delivery tumbled 4.9% to settle at 15.38 cents a pound on the ICE Futures U.S. exchange, the lowest level for the front-month contract since Apr. 28, 2016.
In its latest forecast released on Wednesday, Brazil's sugar-industry group Unica estimated farmers in the country's center-south region would harvest 585 million metric tons of sugar cane for the just-started 2017-2018 growing season. That would represent a decline from the 607.14 million tons harvested and processed in the 2016-2017 season.
"The numbers were a little lower than what everybody was expecting, but still within a range that doesn't change much what the market was considering," said Bruno Lima, head of sugar and ethanol group in Brazil at INTL FCStone. The brokerage's forecast for sugar-cane output was 588.8 million tons.
Brazil is the world's biggest producer and exporter of sugar, and its center-south region grows about 90% of the country's cane.
A day earlier, India, the world's largest sugar consumer, said that declining sugar sales have left the country with enough stocks until the next crop, suggesting that India would probably need no more imports to help alleviate its tight supplies, according to the Indian Sugar Mills Association.
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Newswires reported on Wednesday that China was considering imposing special import duties on sugar as part of antidumping efforts, which could start as early as May. If approved, the proposal would introduce a 45% duty this fiscal year, which could significantly discourage sugar imports.
Sugar prices have been retreating in recent months, losing more than 30% since early October, as a lack of fresh news drove many speculators to unwind their bullish bets. The pullback came as a disappointment to traders who were attracted to the sugar market early this year betting on growing demand from India and China.
"I still think they will have to buy, especially India, because the numbers don't close out," Mr. Lima said.
In other markets, cocoa for July added 1.2% to settle at $1,875 a ton, arabica coffee for July was down 1.3% to close at $1.3070 a pound, frozen concentrated orange juice for July was up 1.7% to settle at $1.5975 a pound, and July cotton added 0.04% to end at 79.39 cents a pound.
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(END) Dow Jones Newswires
April 26, 2017 14:57 ET (18:57 GMT)