Raw sugar futures settled firmer Monday on investor buying as constructive fundamentals appear set to nudge the market higher in the coming weeks, brokers said. The key May raw sugar contract added 0.11 cent to end at 12.99 cents per lb. Trading from 12.76 to 13.04 cents. Volume traded in the May contract reached 26,418 lots at 2:13 pm EDT (1413 GMT).
July sugar rose 0.09 to finish at 13.35 cents. Sterling Smith, an analyst for brokers FuturesOne in Chicago, said there is apparently "some upside" to the market going forward. Andy Duff, head of food and agribusiness research at Rabobank, told Reuters raw sugar should see an average price of 13 to 14 cents per lb in 2009.
Sugar is an exception to a deteriorating economic outlook because India and the European Union are turning into net sugar importers from net exporters. India is expected to produce 15.7 million tonnes of sugar in the year to September as cane shortages mount and stocks shrink, a trade official said.The Gujarat Ambuja Exports Ltd trading firm in India is negotiating to import about 200,000 tonnes of raw sugar, its chairman and managing director said.
Analysts said if the May contract surmounts the area of 13.30/35 cents, the market may take aim at 14 cents. Technicians believe resistance in the May contract is at 13.30/35 and 13.50 cents, with support at 12.50 and 12 cents. Volume traded Friday in the No 11 sugar market hit 78,003 lots - exchange data.
Open interest for No 11 sugar market at 619,594 lots as of March 13, from the prior tally of 615,532 contracts. The domestic No 14 sugar contract showed the May contract down 0.08 cent at 18.90 cents at 2:14 pm volume on Friday in the No 14 market amounted to 193 lots - exchange data.
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