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Sugar Futures Trying to Recover from Roller Coaster Trading Week

June 8, 2017 at 14:25 by Andrew Moran

Sugar futures are trading flat on Thursday after a whirlwind week stemming from trade talks between the US and Mexico governments. After extensive discussions between the US and Mexico, investors have eased some of their concerns about a potential international surplus of sugar.

July sugar futures dipped $0.01, or 0.07%, to 14.13 cents per pound at 14:03 GMT on Thursday on the ICE Futures exchange. For the past five trading sessions, sugar prices have fluctuated between a low of 13.75 cents and a high of 14.40 cents. Year-to-date, sugar prices have tumbled more than 25%.

The sweetener had edged up on Wednesday after an agreement was made between the US and Mexico that lowers the permitted amount of refined sugar for Mexico imports from 53% to 30%. At the same time, the Mexico sugar industry maintains access to the US market. Sugar investors were pleased because it avoided the possibility of Mexican sugar hitting the global markets, which would have increased the global glut of the sweetener.

This is just one of many deals the new US administration is trying to make. President Donald Trump has repeatedly said over the last 18 months that the US must adopt an America First attitude when it comes to trade agreements.

Prices surged higher as reports suggest that Brazil’s Copersucar S.A., one of the planet’s biggest sugar producers, lowered its forecast for the nation’s sugar production in the 2017–2018 crop season. The outlook was slashed from 36 million tons to 35.5 million tons because of falling sugar prices.

India may be able to offset Brazil’s losses in the coming months as the world’s second-largest sugar producers is starting to amplify its production levels. It is estimated that India’s sugar production will top 25 million tons in 2017 and 2018.

In other commodities, July coffee futures fell $0.05, or 0.04%, to $1.257 per pound. July orange juice futures climbed $0.055, or 0.42%, to $1.324 a pound. July wheat futures rose $0.0375, or 0.84%, to $4.485 per bushel.

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