Sugar prices were on track to fall for a third straight session
Thursday as traders awaited news out of Brazil regarding the pace of
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Raw sugar for July lost 0.9% to 15.53 cents a pound on the ICE Futures
Brazil, the largest producer of sugar, had a disappointing start to
its crushing season in April, due to excessively wet conditions. But
analysts surveyed by S&P Global Platts are now expecting the pace of
sugar production to speed up.
Analysts say they expect 36.15 million tons of sugarcane to be crushed
in the largest growing region of Brazil, a 9% drop over the same
period last year but a 50% increase from the second half of April.
Meanwhile, concerns about demand for sugar are weighing on prices,
says Commerzbank. Analysts at Platts Kingsman have said they expect
this year to see the lowest global sugar demand growth in a seven
"Widespread political efforts to encourage people to adopt a low-sugar
diet -- through compulsory labeling and sugar taxes -- appear to be
dampening the demand outlook," Commerzbank noted.
News that OPEC members would renew an agreement to cut crude production through March 2018, helped to stem losses. A positive turn for ethanol prices,
traders said, could encourage sugar producers to convert a larger
percentage of cane to ethanol. At the moment, analysts are expecting
about 45.87% of cane to be used to produce sugar, up from 42.9% a year
In other markets, cocoa for July was off 0.3% at $1,889 a ton, July
arabica coffee fell 0.7% to $1.277 a pound, frozen concentrated orange
juice for July lost 0.3% to $1.355 a pound and July cotton fell 0.3%
to 77.30 cents a pound.
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(MORE TO FOLLOW) Dow Jones Newswires
May 25, 2017 11:25 ET (15:25 GMT)