Raw sugar steadies

London (Reuters): Raw sugar futures on ICE steadied on Wednesday after falling sharply during the previous session following the suspension of a fuel tax increase in Brazil.

In October raw sugar was up 0.02 cent, or 0.14%, at 13.92 cents per lb at 1350 GMT after dipping to 13.73 cents, the weakest price for the front month since 13 July.

Dealers said the market was consolidating after falling sharply on Tuesday on news that a large fuel tax increase in Brazil, announced by the government last week to reduce a budget deficit, had been suspended.

Prices rose to a seven-week high last week after the tax changes were announced, as they would potentially have led to more cane being used to produce ethanol rather than sugar.

But a Brazilian federal judge suspended the tax increase on Tuesday, according to a court ruling seen by Reuters.

Sucden Financial co-ahead of softs Tom Kujawa said the market was awaiting an update on the legal proceedings in Brazil and the extent of damage to Brazil’s cane crop from a recent cold snap.

“Otherwise we seem likely to trade 25 points or so either side of 14 cents,” he said in a market note.

October white sugar was up $ 0.10, or 0.03%, at $ 382.10 a tonne.