Raw sugar futures finished at a three-week high on investor fund buying following news that India is allowing duty-free imports of the sweetener and the market could punch higher this week, brokers said. The sugar market was closed Friday for a holiday.
The key May sugar contract increased 0.58 cent, up 4.55 percent on the day, to close at 13.32 cents per lb. It was the highest close for sugar on a spot basis since March 23. May's trading range was from 12.90 to 13.40 cents. Volume traded in the May contract reached 80,508 lots at 2:43 pm EDT (1843 GMT). July sugar rose 0.46 cent to end at 13.77 cents. India's Election Commission approved a proposal to allow tax-free imports of white sugar, Trade Secretary G.K. Pillai told reporters.
"The Indian news boosted the market," Alex Oliveira, senior sugar broker with Newedge USA, said. There was no reaction in the London white sugar market because it was shut for the Easter Monday holiday. Theo Spettmann, the chairman of Europe's largest sugar company Suedzucker told German newspaper Allgemeine Sonntagszeiting that sugar prices should rise due to tight supplies in the world market.
Oliveira said the elimination of any duties on sugar imports by India over the next few months meant there is a "real potential" sugar imports may expand. The trade had been expecting sugar imports by India to reach 1.0 million tonnes. With duties out, that may climb to as high as 2.0 million tonnes. Technicians believe resistance in the May contract is at 13.50 and 14 cents. They said support in May should be at 13 and 12.50 cents.
Volume traded Thursday in the No 11 sugar market was at 222,605 lots, from the prior 151,061 lots - the exchange said. Open interest for No 11 sugar market was at 694,121 lots as of April 9, from the previous 699,940 contracts - exchange data. The No 14 sugar contract showed the July contract flat at 21.70 cents at 2:45 pm volume on Thursday in the No 14 market was at 35 lots, against the previous 332 lots - exchange data.