Raw sugar futures closed Friday near a four-month low on investment fund liquidation brought on by a financial crisis that has pounded all financial markets, brokers said. The March sugar contract slid 0.67 cent to finish at 11.23 cents per lb, moving from 11.20 to 11.77 cents.
On a spot month basis, it was the lowest close for sugar since mid-June when it was trading near 11 cents. At the start of October, the spot month ended at 13.93 cents. Since then, it has lost nearly 20 percent in value. May sugar was down 0.65 cent at 11.44 cents. Volume traded in the March contract hit 65,798 lots at 2:23 pm EDT (1823 GMT).
Jack Scoville, vice-president of brokers the Price Group in Chicago, said products like sugar are getting to a level where some bottom formation is possible. He said that a bottoming out in sugar, as in other markets, would be "multi-stage process." "We are still in the process of letting anybody who wants to get out be accommodated," said Scoville.
Fundamentally, dealers said there were signs that despite a crisis which may dent demand, sizable consumer interest should help support sugar going forward. India has already bought 350,000 tonnes of raw sugar from Brazil and may be in the market for up to 800,000 tonnes more.
The US sugar supply situation has also stayed tight. The US Agriculture Department said the stocks-to-use ratio stood at 6.0 percent from 4.6 percent in a previous report. Longer-term, analysts feel sugar should get a boost from steady demand from countries like China and India.
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