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Raw sugar futures hit five-month highs on Thursday as speculators grew increasingly bullish after the escalating U.S.-Israeli war against Iran pushed oil prices near a three-and-a-half-year peak.
Rising energy prices could prompt cane mills in top grower Brazil to raise ethanol output and lower sugar production. Ethanol is a cane-based biofuel.
Raw sugar rose 3.7% — to 15.34 cents per pound, after hitting its highest since mid-October at 15.49 cents.
Marking a major escalation in the war, Iran attacked key energy facilities across the Middle East following Israel’s strike on its giant South Pars gas field.
Sugar speculators are covering their short positions by taking on long positions, which are essentially bets on prices rising, noted Alberto Peixoto, director at AP Commodities.
He added, however, that “producer selling is greater than spec buying (overall),” signalling a limit to how much prices can rise.
White sugar rose 3.1 per cent to US$450.60, having hit its highest since early October at US$455.80.
More details: https://globalnews.ca/news/11738049/sugar-prices-five-month-high-iran-war/