Raw sugar futures closed with small gains Thursday as the market consolidated after a steep decline followed a rally that had hoisted values to nearly a three-year top, brokers said. The July raw sugar contract added 0.07 cent to finish at 15.47 cents per lb. The contract traded from 15.19 to 15.56 cents.
Volume traded in the July contract reached 42,016 lots at 2:09 pm EDT (1809 GMT). October sugar rose 0.10 cent to end at 16.25 cents. "We took a little nose dive early and then recovered. It's just consolidating around these levels," said a dealer for a US financial house. Analysts said sugar seems well supported in front of 15 cents, with short-covering showing up at lower levels.
Another source of support going forward for sugar is the fact that consumer buying should stabilise values. Traders said a retreat in values may spur importers in India, the world's No 1 consumer of sugar, to step back into the market. India still needs to book around 400,000 tonnes of sugar and most in the trade believe imports for 2009-10 would reach 2.5 million tonnes of sugar.
Other sources of possible sugar buying are Pakistan, which is seen importing 730,000 tonnes of sugar, and maybe China, which bought 30,000 tonnes of sugar last month. Technicians put resistance in the July contract at 16 cents. Support in July should be at 15 and 14.50 cents.
Volume traded Wednesday in the No 11 sugar market was 121,733 lots, from the prior 166,023 lots - the exchange said. Open interest in the No 11 sugar market was at 688,369 lots as of May 13, from the prior 687,013 contracts - exchange data. The No 14 sugar contract showed the July contract up 0.04 cent at 21.44 cents at 2:10 pm volume on Wednesday in the No 14 domestic sugar market was at 562 lots, against the previous 446 lots - exchange.
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