Sugar prices pared losses Thursday as traders awaited news out of Brazil regarding the pace of sugar production.
Raw sugar for July lost 0.1% to end at 15.66 cents a pound on the ICE Futures U.S. exchange.
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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 years.
"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. So far, it is unclear if that will be the result of the decision. At the moment, analysts are expecting about 45.87% of cane to be used to produce sugar, up from 42.9% a year earlier.
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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(END) Dow Jones Newswires
May 25, 2017 18:14 ET (22:14 GMT)