Sugar #16 Futures Market News and Commentary
October NY world sugar #11 (SBV19) on Tuesday closed up +0.10 (+0.80%) and Aug ICE London white sugar #5 (SWQ19) closed up +1.10 (+0.34%). Sugar prices settled higher Tuesday on strength in crude oil. A rally in crude oil on Tuesday to a 3-week high was supportive for ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar production. Sugar prices came off of their best levels Tuesday after the Brazilian real weakened against the dollar. A weaker real encourages export selling by Brazil’s sugar producers. Signs of stronger sugar demand from China is supportive for sugar prices after Sunday's data from the China Customs Office showed that Chinese May sugar imports surged +89% y/y to 380,000 MT, the most in 13 months. Another positive for sugar is concern about India's sugar crop as data from India's Mereological Department on Monday showed monsoon rains in India are 37% below normal as of June 24. On the negative side is the threat of increased sugar exports from India, the world's second-largest sugar exporter. The Indian Sugar Mills Association (ISMA) on Jun 14 said it expects to export a record 7 million MT of sugar in 2019/20 to reduce its huge stockpiles, up from 3 million MT in 2018/19.