Sugar Futures Grind Lower as Exports From India Slowing

Sugar futures continue to pull-back as shipments of sugar from India – the world’s second-biggest producer of sugar – have slowed after sugar prices reached a 15-month high earlier this year. The largest sugar refiner in India said they are considering “export incentives” in an effort to promote their product, but so far no decision made.

 

To give you an idea of the sugar export slowdown, India’s exports may total nearly 300,000 tons in the six-month period into September, and when you compare this with the 1.5M tons exported in the six-month period prior, you can clearly see the concern. The slow exports may be supporting sugar prices temporarily, but there are forecasts for a global sugar deficit because of the adverse weather in Australia & Brazil.

The recent drop in sugar futures has begun to taper off as the supply situation remains in question. India’s sugar output for 2014-15 is expected to rise 3 percent but a growing domestic consumption expectation will result in tighter supplies,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current sugar futures situation. Levy added, “Additionally sugar production out of Brazil shows a large amount of near term supplies but there is much concern over smaller harvest figures for the sugar still in the fields.”

The technical trend for sugar futures remains down. There seems to be volatility on the sugar futures charts down here at these levels that keeps me out of this market.

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