Record Prices, Imports Hit Sugar Futures

Record sugar cane prices and surging imports are prompting sugar mills in India to sell below production costs.  India is the worlds second biggest producer of sugar, and they are preparing to lose just over $1B in the sugar production market.

Sugar factories in two Indian provinces, which account for 65% of India’s sugar output, are now selling sugar no less than 11% below cost.  A manager at one of the mills claims “halting cheap (sugar) imports” is a solution to their problem.

There is an abundance of sugar out there at the moment.  This fundamental factor continues to put pressure on the sugar market,” said Kevin Craney, a senior commodities broker for RJO Futures in Chicago, regarding the current sugar futures situation.  Craney added, “The (sugar futures) trend remains to the downside, and any correction looks to be selling opportunity.”

The technical trend for sugar futures remains down, but truth be known it is grinding to a halt.  I am only looking for selling opportunities in sugar futures when low-risk opportunities present themselves.

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