Shortages to Ensure Recovery in Prices Still Not Enough for Sugar Futures

Sugar futures is in a unique situation with “price discovery” with supply and demand, according to the Int’l Sugar Org. They are of the opinion that before sugar prices can recover significantly, global sugar consumption needs to be more than three to four times what the projected supply will be.

The senior economist for the I.S.O. claims the global market should have a surplus of only 1.3M tons starting in October and a small deficit the following year. In October, it will start the fifth-year of a world-wide sugar glut.

Sugar supplies are so high that for sugar prices to recover in any significant way we will need close to a 3-4 million ton deficit in consumption versus supply,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his insight regarding the current sugar futures situation.

The technical trend for sugar futures remains down with no bottom yet in sight. This has become a tricky market in the fact that in can be weeks before sugar futures retraces enough to “sell the rallies.”

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