Sugar Selloff Extends Into Fourth Session

By FeaturesDow Jones Newswires

Sugar futures ended in a fourth-straight session of losses as traders eye a surplus for the current marketing year.

Raw sugar for March was off 1.8% to end at 14.10 cents a pound, its lowest close since Oct. 23.

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Commerzbank said in a note that the global sugar market is expected to have a sizeable supply surplus in 2017/2018 due to higher production in India, Thailand and the EU, with surplus estimates ranging from 5 million to 10 million tons.

"This outlook should prevent the sugar price from recovering," the firm said.

In India, the world's second-largest producer, the International Sugar Organization says production "has gotten off to a flying start." As of Nov. 30, sugar production reached 3.951 million tons, up from 2.782 million tons produced by the same time last year. There are already 443 mills operational compared to 393 a year ago, according to the Indian Sugar Mills Association.

The selloff follows a months in which sugar notched gains on expectations that a smaller proportion of cane should be directed to sugar production in Brazil rather than ethanol. Brazil is the world's largest producer of sweetener from cane, which can also be used for ethanol production.

In the first half of November, 42.55% of cane was allocated towards sugar, compared to 47.95% last year, according to industry group Unica.

In other markets, March arabica coffee fell 0.2% to end at $1.226 a pound, January frozen concentrated orange juice lost 0.4% to settle at $1.5285 a pound, March cocoa rose 0.4% to end at $1,887 a ton and March cotton lost 0.7% to end at 73.72 cents a pound.

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

(END) Dow Jones Newswires

December 08, 2017 18:21 ET (23:21 GMT)