Sugar is at a five-week low due to speculation that Brazil and India, the largest sugar growers, will increase sales due to their currencies weakening against the dollar – the primary currency for international trade.
Nearly 921,093 metric tons of raw sugar is waiting to be loaded in Brazilian ports and headed to China and Africa, among other countries. This is up from the 773,591 tons in the prior week.
“The recent weakness in the Brazilian real and the rupee will continue to encourage producer selling,” Jeff Dobrydney, a vice president at Jenkins Sugar Group. The Brazilian real is down over two percent, and the rupee down 1.5 percent against the dollar.
Recently, global food prices increased last month on the back of sugar’s gains while reaching a yearly high of $20.16 last month after a fire broke out in a major sugar warehouse in Brazil and destroyed 180K metric tons of sugar; and October was a relatively volatile month.
However, sugar has declined 11 percent since the high made in October.
The price of sugar bounce off the 200 EMA on the daily chart of sugar No. 11 futures. Technical indicators still are suggesting further downside in sugar, and this should continued fundamentally as major producers sell more product. Price action still remains above the 50 percent Fib. level and could be the line in the sand, direction wise.