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Sugar Declines for Fourth Day as Prices Deemed Maxed

April 28, 2011 at 15:22 by Andriy Moraru

Sugar continued this week’s decline with another bearish day today, as the industry specialists commented that the commodity price is capped at no more than $25 per 100 pounds.

Thailand, the world’s second biggest sugar producer after Brazil, increased its annual output by 37 percent. Meanwhile, Goldman Sachs forecasts that the price for sugar will reach $20 per 100 pounds during the next 6 months, compared to the February all-time high of $36.08 per 100 pounds.

This soft commodity was a major hit until February this year and is in a constant downtrend since that time, contributing to a monthly decline of food prices globally. Cheaper sugar is also a perfect stimulus for the food companies such as the US based Kraft Foods Inc. and Swiss Nestle SA to increase production, while the former had previously lowered profit forecasts due to the elevated commodity prices.

Sugar futures with delivery in May is now trading near $23.68 per 100 pounds as of 15:17 GMT on ICE, down from $24.39 or almost 3%.

If you have any questions and comments on the commodities today, use the form below to reply.

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