Sugar futures rebounded by more than 6% after data showed mills in Brazil’s key Centre South region continuing to lose ground against ethanol in the battle for cane.
New York raw sugar futures for March soared to 14.87 cents a pound at one point before easing back to 14.70 cents a pound in late morning deals, a gain of 5.1%.
The jump followed the release of data by Unica, the Brazilian cane industry group, showing that mills diverted just 42.2% of their cane to making sugar, rather than ethanol, in the Centre South in the second half of October.
That compared with expectation of a 43.1% figure, according to an analysts’ survey by Platts.
Although, with more cane processed than expected, actual sugar production came in at 2.17m tonnes, marginally ahead of market forecasts, the idea that sugar prices needed to fight harder to win their share of cane was deemed bullish, a London analyst said.