Sugar May Decline as India Boosts Supply With More Exports, Survey Shows.

Sugar futures may decline in New York and London as India, the world’s second-largest producer, seeks to boost exports.

Six of 13 traders, analysts and brokers surveyed by Bloomberg News said raw sugar traded in New York will drop next week. Five predicted a rise, and two said the price will be little changed. Raw sugar has dropped 6.5 percent this week to 18.29 cents a pound yesterday on ICE Futures U.S.

Sugar mills in India must be allowed to export to benefit from a “squeeze” in global supplies, the Indian Sugar Mills Association said this week. Brazil is the world’s biggest producer.

The prospect of increased supply from India is “putting pressure” on prices, said Jonathan Kingsman, the managing director of Kingsman SA, a sugar and ethanol-research company in Lausanne, Switzerland.

Seven of 13 respondents said white sugar traded in London will decline and six said the price will climb. Refined sugar has dropped 6.9 percent this week to $545.20 a metric ton on the Liffe exchange.

Refined sugar’s premium over raw sweetener will probably narrow, according to eight of 13 surveyed. Three said the spread will widen, and two said it will be little changed.

In the attached chart, red bars are derived by subtracting bearish forecasts from bullish estimates for raw sugar, with readings above zero signaling that most respondents expect higher prices. The green line shows raw-sugar prices, and the blue line shows white sugar.

Bullish on raw sugar: 5       Bearish: 6     Neutral: 2
Bullish on refined sugar: 6   Bearish: 7     Neutral: 0
Widening refined premium: 3   Narrow: 8      Neutral: 2


Source : bloomberg.com