Raw sugar futures settled 1 percent lower in quiet trade on Monday as a stronger dollar against the euro and initial crude oil weakness prompted profit taking, traders said. The October sugar contract ended 0.15 cent, or 1 percent, lower at 13.99 cents per lb on ICE Futures US Trading range from 13.93 to 14.13 cents.
March dropped 0.12 cent to 15.49 cents, trading from 15.40 to 15.60 cents. Volume traded in the October contract was at a light 20,757 lots at 2:51 pm EDT (1851 GMT). Monday's trading largely quiet due to a UK market holiday, and sugar seen to move range-bound in the near term - trader. Sugar's near-term direction depends on the currency and energy markets, rather than its own market fundamentals - traders.
Mozambique urgently needs to increase its sugar output in order to meet rising global demand - government minister. The bullish factors for sugar would be lower yields in leading producer Brazil and more exports of the alternate fuel ethanol by the Latin American giant, which may crimp sugar supplies. The other factors supporting the sweetener are lower production in India and an increase in consumer demand.
There is also the perception the United States, which recently approved imports of 300,000 short tons, may eventually have to reenter the market for more sugar purchases. Total deals done on August 22 reached 64,798 lots - exchange data. Open interest in the No 11 raw sugar market gained 1,912 lots to 818,035 contracts as of August 22, the exchange said.