iGrain India - New York. Due to strengthening of the exchange rate of Brazilian currency - Real, some softening was recorded in the future price of sugar yesterday.
The future price of raw sugar in New York Exchange for July contract fell by 0.38 cents per pound or 2.03 percent and the future price of white sugar in London Exchange for August delivery fell by 10.10 dollars per tonne or 1.82 percent.
Usually, due to strengthening of Real, Brazilian sugar becomes expensive for foreign buyers and hence its export is likely to be affected. Brazil is the world's largest producer and exporter of sugar.
For the last eight weeks, there has been an atmosphere of softening or stability in the global future price of sugar.
Like the last season, Brazil is expected to have a great production of sugar this time as well. On May 16, the future price of sugar in New York Exchange fell to the lowest level in the last one and a half years, while the price in London Exchange also went to the lowest level in one and a quarter years.
The apex body of the Brazilian sugar industry - UNICA, in its report dated May 15, said that compared to last year, the domestic sugar production in the second fortnight of April this year jumped 84 percent to 18.43 lakh tonnes.
Like last year, during the current year too, millers in Brazil are likely to increase the use of sugarcane instead of ethanol in the production of sugar.
Since India has also produced more sugar than the domestic demand and consumption, there may be stability in the global market. However, the Indian government is not in the mood to open sugar exports in the current marketing season.