Sugar market was one of the most influenced from the US Presidential Election results in the first week of November 2016. Through the last days of the year, the market had experienced a strong loss on the global forex market. If we look at the big picture for the global sugar market, it was a so positive year for the sugar market. The starting point was at 14.46 level at January 2016, and reached over the 19.60 level at the end of the year. Indeed, the shining stars were coming from the Brazilian market during the last year, cocoa and sugar were two of the most popular. We have observed a bit negative climate conditions in the biggest sugar producers of the world like Brazil and India. So, the prices experienced a positive trend, but the production amount had decreased.
We talked about the rally in coffee prices before, but when we came to the sugar market, we met with a more interesting picture from the basic point of view. In Brazil and India, two major producers of the sugar market, adverse weather conditions are pushing production down, while global sugar demand has been on the supply for the first time since the last seven years, according to a report by the US Department of Agriculture (USDA). As can be seen in the technical analyses, the most important fact is supply rises in the market while raising global sugar demand since May 2015. It would be wrong to expect a serious downward correction in the prices until the base of the market goes back to oversupply. It is more reasonable for us to comment on analytical data for this reason, which is a difficult variable to estimate the effect of production of weather conditions on sugar in our tracking list.
Watching monsoon rains in seasonal norms for the year 2017 may bring about the conditions of production normalized in the region. The market will continue to find direction with the changing weather conditions, but the market which is in serious supply continues to have a potential up to the normalization. Finally, we can say the first signals will be about to the recovery side of the global sugar market.
- Date: 10 January 2017 Tue 03:58
- Last Added
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