Sour times for sugar

Sugar price hits nine year lows


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Sugar is facing a period in the pricing doldrums due to high levels of production globally.

Sugar is facing a period in the pricing doldrums due to high levels of production globally.

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Sugar futures have plummeted to a nine year low on the New York Stock Exchange.

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A WORLDWIDE glut of sugar, combined with a weak Brazilian real has led to the futures price on the world’s benchmark sugar trading exchange, the New York Stock Exchange, to sink to a nine year low.

On Monday prices for the July contract slumped by a whopping 4 per cent to hit a low of US11.40 cents a pound, which represents the lowest quote for a nearest but one contract since 2009.

There has been a 9pc dip in the Brazilian real priced against the US dollar since late January, with the real weakening and the USD strengthening against other currencies.

As the world’s leading producer and exporter of sugar, the weakness in the real makes it more difficult for other nations to be price competitive, especially as Brazil is a low cost producer to start with.

There is already a large surplus of sugar globally and forecasts are for a good season, especially in South America.

Even with an increase of the large ethanol program in Brazil it will still be difficult to find a home for all the sugar being produced all of which is weighing heavily on the market.

Market analysts are forecasting a protracted period in the doldrums for the commodity, saying it is unlikely the backlog will be cleared for at least 12 months.

The story Sour times for sugar first appeared on Farm Online.

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