Sugar futures drop further on ample supply

Sugar futures fell to a five-week low on signs that global supplies will outpace demand. Orange juice declined.

India is offering more surplus sugar, and floods in Thailand, the world’s second-biggest exporter, may lead to only “minor” losses, Jack Scoville, a vice president for Price Futures Group in Chicago, said in a report. Russian and European crops were seen as “very good” this year, he said.

“Supply concerns are pretty much nonexistent, and that is working to weigh on sugar,” Sterling Smith, an analyst at Country Hedging Inc. in St Paul, Minnesota, said in a telephone interview. “Demand for sugar remains relatively stout. We have seen some awfully weak export sales in the grain market, particularly in corn, and we may see that carry over to sugar.”

Raw sugar for March delivery dropped 1.5 per cent to 25.01 cents a pound at 11:06am on ICE Futures US in New York. Earlier, the price touched 24.8 cents, the lowest for a most- active contract since October 7. The price headed for the fourth straight weekly decline.

Before today, sugar dropped 21 per cent this year. Brazil is the leading exporter.

Orange-juice futures for January delivery dropped 1 per cent to $1.6935 a pound in New York. The price headed for the fifth straight decline, the longest slump since August.