Key insights
- Raw sugar futures declined due to falling energy prices, which incentivize increased sugar production over ethanol, and a significant drop in Chinese sugar imports. While El Niño concerns offer some price support, the overall trend points to bearish pressure on sugar markets, potentially reflecting broader commodity demand weakness.
Investing.com -- Raw sugar futures declined on Thursday as falling energy prices and weaker Chinese demand weighed on the market. The July contract dropped 1.9% to 13.59 cents per pound, after reaching a nearly two-month low of 13.56 cents on Tuesday.
Lower energy prices are influencing cane mills to reduce ethanol fuel production and increase sugar output, adding to market pressure.
China, which ranks as the world’s top sugar importer, brought in 36.8% less sugar in May compared to the same month last year, according to recent data.
Concerns about potential production disruptions from El Niño weather patterns provided some support to prices, preventing steeper declines. White sugar futures for August delivery fell 1.5% to $445.30 per ton.
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