NEW YORK: SUGAR headed for the highest annual gain in four years as demand improves and global supply tightens.
Key buyers Indonesia and China are ramping up imports of sugar at a time when the market also is contending with a lower crop outlook in Thailand and dry weather concerns in top shipper Brazil.
Markets also will keep an eye on domestic ethanol demand in Brazil, a key factor in determining the nation’s sugar production next year.“With demand remaining strong through the Covid shutdowns, sugar prices should remain fairly well supported on near-term pullbacks, ” the Chicago-based Hightower Report said.
“Drier than normal conditions over Center-South cane-growing areas are expected to result in a decline in Brazil’s 2021/22 sugar production, and that decline would rise if Centre-South mills have a large shift to ethanol production.”
Raw sugar futures for March delivery rose as much as 1.3% to 15.48 cents a pound, the highest in more than a month, before paring gains in New York.
Prices advanced for an eighth straight month in December, the longest run of monthly gains since 2006. White-sugar futures were steady in London.
In other soft commodities, cocoa was little changed in New York and London, while arabica coffee rose in New York. — Bloomberg
