March raw sugar futures fell to 19.83 cents per lb on November 17th after hitting a seven-month peak of 20.44 cents on November 16th. As the analyst, Tobin Grey at the Commonwealth Bank of Australia pointed out, "the strong sense that the sugar market had gained too much, too quickly, finally manifested." The March white sugar settled at US$532/tonne. The drop in price on the 17th was informed in good part by falling oil prices. Ethanol demand shrank as international oil prices fell 4 that day. According to financial research firm Bachard, ethanol prices have fallen in line with falling oil prices. For this reason, the millers in Brazil diverted cane to sugar production at the expense of ethanol. A weaker Brazilian real also depressed sugar prices. On this day, the real value was 5.42 against the dollar. The real has devalued for 10 consecutive months. Weaker real encourages sugar producers to export the commodity.
展开▼
