On Wednesday, sugar prices shrunk to 2-1/2-week lows amid forecasted rains for Brazil, which has softened drought concerns.
In the Asian afternoon session, the US commodity futures for March delivery closed the trading by declining -1.87% to $0.22 per pound. London futures for December contracts stood at $563.30 a ton.
According to reports, rains are anticipated to continue this week across the Central South of Brazil, the nation’s most significant sugar-producing region.
Furthermore, the funds’ large net long position in London white sugar might intensify long liquidation worries in the event of a price decline.
Sources revealed that optimism over above-average showers in India may also drive crop output, which is unfavorable for sugar prices.
The Indian Meteorological Department said New Delhi received 934.8 millimeters (mm) of rain during the latest monsoon season. This is a record in four years and 7.60% better than the long-term average of 868.6 mm.
Moreover, the projection for higher output in Thailand is bearish for sugar costs. The country’s Office of the Cane and Sugar Board anticipated that Bangkok’s 2024/25 sweetener yield would increase by 18.00% year-over-year (YoY) to 10.35 million metric tons (MMT).
The US Department of Agriculture also revealed its bi-annual forecast that next season’s global sugar production might jump by 1.40% YoY to 186.02 MMT.
Brazil Rain and Weak Real Pulls Sugar Prices
According to reports, Brazil’s recent rains and weak real has been battering the sweetener’s prices.
Furthermore, sources revealed that Brasilia’s real has been experiencing declines for a two-week low.
Meanwhile, Bangladesh’s National Board of Revenue (NBR) said it cut the regulatory duty on refined and raw sugar imports by 50.00% to control local retail costs.
In addition, to deduct the price of sugar, the duty has been reduced from 30.00% to 15.00%, effective immediately.
The board highlighted that its action was intended to make the sweetener’s costs more bearable for consumers.