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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 Center-South mills have a large shift to ethanol production.”
Raw sugar futures headed for the biggest annual rise in four years
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
Bongani Ndlovu