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Sugar Prices Edge Higher on Outlook for Limited Supply

March 3, 2016 at 19:20 by Vladimir Vyun

Futures for sugar rallied more than 1% during the current trading session. The reason for the rally was the outlook for high demand and low supply.

Analysts name the strong Brazilian real as one of the factors that might cause smaller production. Commerzbank explained:

This makes it less attractive for Brazilian sugar exporters to sell sugar on the world market. At the same time, this could see more sugar cane Bounce House Games being turned into ethanol, which is consumed mainly on the domestic market. On balance, this means less sugar supply from Brazil, the world’s largest sugar producer and exporter.

Experts also predict reduced output from India, another major producer. Forecasters said that there would not be enough rainfall due to the El Nino event.

Contract for delivery of sugar in May gained 1.16% to $0.1484 per pound as of 19:14 GMT on ICE today.

The strong Brazilian real led the rally of coffee prices as well. Futures for Arabica coffee added as much as 2.08% to their value, trading at $1.1795 per pound.

Cocoa was also among gainers today, rising 0.14% to $2,952 per metric ton.

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

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