Sugar prices moved higher in line with global markets Thursday following the contract’s trend this week of trading in line with global macro events.
Raw sugar for March delivery rose 2.5% to 14.54 cents a pound on the ICE Futures U.S. exchange.
The sweetener’s path Thursday is a reversal from Wednesday when the contract followed the collapse of oil to 12-year lows, the currency of Brazil, the world’s largest sugar producer, to four month lows and a sell-off in global equity markets.
“Macro influences remain a major driver in sugar prices,” Agrilion Commodity Advisers said in a note.
Raw sugar prices have been trading in a tight range since November as the sugar market is expecting that the current global marketing year will end with demand for sugar outstripping production for the first time in six years.
Commerzbank said in a note that global sugar consumption is expected to rise by 2.3% until at least 2017 in spite of growing concerns about obesity and diabetes. Production, the firm said, is unlikely to meet demand because of a poor monsoon in India, the world’s second largest sugar producer, decreasing supply from Thailand and lower production out of Europe.
Platts’ Kingsman has said it expects demand to also outstrip production by 5.3 million tons this year and by 7.8 million tons next year.
In other markets, cocoa for March delivery fell 1.5% ahead of demand data expected today out of North America. Traders are closing out long positions that helped make cocoa one of the best performing commodities of 2015.
Arabica coffee for March rose 1.1%, cotton for March was up 0.5% to 62.29 cents a pound and frozen concentrated orange juice futures fell 2.5% to $1.1705 a pound.