Sugar Retreats Sharply

Sugar futures on ICE were at 18 cents per pound, retreating sharply from the three-month peak of 18.8 cents hit on October 12 amid expectations of strong global supplies ahead of the new global sugar season.

According to industry group Unica, output in major producer Brazil’s center-south regions reached 1.83 million tonnes in the first half of October, a 59% increase from the corresponding period of the previous year.

Still, a larger decline in prices was capped by the prolonged rebound in gasoline prices since the beginning of the month.

Higher fuel costs are set to drive producers to use sugarcane to produce biofuels instead of crushing sugar, decreasing the supply of sweeteners.

Prices also remained highly volatile as investors await the run-down of Brazilian presidential elections.

If elected, right-wing incumbent Jair Bolsonaro has pledged to privatize state-owned oil giant and price regulator Petrobras, increasing uncertainty over fuel prices in the country.