Sugar Jumps as Production Becomes Less Lucrative

By Julie Wernau Features Dow Jones Newswires

Sugar futures pushed higher Wednesday, with more producers converting cane to ethanol and paring back sugar production.

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Raw sugar for March rose 2.7% to end at 15.28 cents a pound on the ICE Futures U.S. exchange.

Sucden Financial said bulls in the market have been betting on a new policy which incentivizes the use of renewable fuel in Brazil. Cane producers are converting more cane to ethanol and moving away from sugar as a result, with the advantage of ethanol over sugar estimated at 1.21 cents a pound over New York sugar futures.

"Benchmark sugar prices have risen significantly since June, in line with global and specifically Brazilian gasoline prices," Societe Generale said in a note.

The firm is forecasting that prices for sugar will fall over the next six months to 14.40 cents a pound, driven by production recovery in India, Thailand, China and the European Union and a retracement in energy prices, with new supply outstripping demand by 5.5 million tons.

Cocoa for March rose 0.7% to end at $2,124 a ton, arabica coffee was up 0.3% to settle at $1.27 a pound, frozen concentrated orange juice for January ended flat at $1.6675 a pound and March cotton rose 1.4% to end at 71.14 cents a pound.

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Write to Julie Wernau at julie.wernau@wsj.com

(END) Dow Jones Newswires

November 22, 2017 16:26 ET (21:26 GMT)