ICE sugar slides as spec buying wanes
Published: 03/13/2018, 5:06:12 PM
Raw sugar futures on ICE fell on Tuesday, weighed by a looming global supply glut and a slowdown in speculative short covering, according to Reuters.
ICE May raw sugar was down 0.07 cent, or 0.5%, at 12.86 cents per lb by 1156 GMT, having fallen to a session low of 12.83 cents.
Prices hovered just above an eight-month low of 12.75 hit last week, after India increased its output forecast for this season, increasing the likelihood it will export to the world market sooner than expected.
The market recovered some ground on Monday on light short covering by speculators, who hold a large bearish stance in the market but dealers said this buying had now dried up.
They also noted participants were cautious about buying up the market, amid worries that producers are yet to hedge a sizeable chunk of their output.
ICE May white sugar also fell US$1.80, or 0.5%, to US$357.60 per tonne.
The front month remained at a premium to the second position, suggesting potentially tighter nearby supply, despite a global glut that is expected to emerge later in the year.
"We are not quite there yet and activity in Brazil has been adding some support," INTL FCStone said in a market update. "However, healthy supply in Thailand, India and Europe will offset this when supply reaches the market."