Sugar Falls on Forecast India Crop to Rise; Orange Juice Gains

Sugar futures fell for the third time in four sessions on forecasts that output will recover in India, the world’s top consumer and second-biggest producer. Orange juice rose to a three-week high.

The National Federation of Cooperative Sugar Factories Ltd. said India’s output may jump at least 24 percent to 23 million metric tons in the season starting Oct. 1 from this year. Raw sugar more than doubled last year partly as India’s production tumbled, creating a global supply deficit.

The Indian news “absolutely weighed on the market,” said Richard Ilczyszyn, a senior market strategist at Lind-Waldock, a broker in Chicago. “Hedge funds and producers are selling the rally” after the price jumped more than 5 percent yesterday, he said.

Raw sugar for July delivery fell 0.45 cent, or 2.6 percent, to 16.6 cents a pound on ICE Futures U.S. in New York. The price has dropped 38 percent this year.

Sugar will trade from 15.45 cents to 18.13 cents unless “major weather issues” affect production, Ilczyszyn said. The sweetener may slump as low as 13 cents should prices breach the lower end of the range, he said.

Futures have tumbled 45 percent from a 29-year high of 30.4 cents on Feb. 1, partly because major importers postponed purchases.

Orange-juice futures for July delivery rose 2.55 cents, or 1.9 percent, to $1.3805 a pound. Earlier, the price reached $1.3875, the highest level since March 26.

The commodity has gained 59 percent in the past 12 months on forecasts for lower output in Florida, the largest orange producer behind Brazil.

Yi Tian
Source: Bloomberg