Raw sugar futures in the US broke through the high from late February spurred on by a number factors. With sugars use in biofuel, in particular in Brazil for ethanol the surprise moves by OPEC+ to cut production triggered prices across the energy fuel structure. WTI oil futures rose 6.3% on the move, Brent futures rose 6.4% and gasoline futures rose 2.98%. Raw sugar prices surged over $22.4 per pound Monday, hitting six year highs.
Sugar was already higher, up 7% over the past week after Brazil’s new federal government ended its tax exemption program for gasoline, raising demand for lower-taxed sugarcane ethanol and adding to the momentum for biofuel blending. Crop damage and unfavorable weather in Thailand and India pressured output projections from other major producers
Prices were supported by expectations of higher biofuel demand and lower output from key producers. The move by OPEC+ encourages sugarcane producers to allocate crops to more profitable biofuel blending instead of sugar crushing and limiting the sweetener supply as a result.
Source: TC
From The TradersCommunity News Desk