Raw sugar prices rise as physical market tightens

LONDON (Reuters): Raw sugar futures rose to their highest level in nearly three months last week, boosted by emerging tightness in the physical market and downgrades to production expectations in India.

Green Pool said that it had trimmed its estimate of India’s crop to 20.3 million tonnes from 20.5 million tonnes, driven by downgraded outlooks for Maharashtra and Karnataka.

“India needs to import 1-1.5 million tonnes of sugar – and the later it occurs, the more likely it will be white sugar rather than raw sugar for further processing in India,” Green Pool said in a report.

March raw sugar futures was up 0.27 cents, or 1.3%, at 21.38 cents per lb by 1201 GMT after peaking at 21.49 cents, the highest for the front month since mid-November.

Dealers also said the tightness that had been expected in the physical market this quarter is now beginning to emerge.

March white sugar was up $5.20, or 0.9%, at $556.10 a tonne.