Sugar Drops on Rapid Sugar Production in Brazil

(NASDAQ) – Raw sugar futures slumped Thursday despite news that India, the world’s second- largest producer, may look to import sugar this season because of dry weather.

Raw sugar for July delivery fell 0.8% to end at 15.71 cents a pound on the ICE Futures U.S. exchange. The contract has been trading in a tight range between 15.47 and 16.05 cents a pound all week.

However, the world’s largest producer of sugar, Brazil, is having a bumper year with trade group Unica confirming that production has been robust and is running about a month ahead of schedule, with a 261% increase to 1.43 million tons in the first half of April over the same period last year.

“The Unica results seemed to surprise on the upside,” Agrilion Commodity Advisers said in a note.

Unica reported that 205 mills were crushing cane by the second week of April versus 165 mills at the same time in 2015. Dry weather and a preference for sugar over ethanol production have helped boost supply.

In other markets, cocoa for July was down 0.3% to close at $3,182 a ton, arabica coffee for July fell 0.5% to end at $ 1.2095 a pound, frozen concentrated orange juice futures for July slumped 0.8% to end at $1.2585 a pound and July cotton closed down 0.7% at 63.69 cents a pound.