Raw sugar futures dropped the most in a week on concerns that new export subsidies by India may lead to a global supply overhang.
India’s production from October 1 to November 5 climbed to 425,000 metric tons, up 32 per cent from a year earlier, the National Federation of Cooperative Sugar Factories said.
Speculation heightened the Asian nation may export as much as 6 million tons this season, easing a global deficit that has supported prices.
The “long-awaited subsidy could bring a stronger selling wave to sugar, regardless of the positive scenario worldwide,” Bruno Lima, sugar head at StoneX, said. Last week, futures rose to the highest since February amid adverse weather in Brazil, the world’s top producer.
Rain relief was forecast for crops this week in the South American nation. Exports in October more than doubled from a year earlier, government data showed Tuesday.
Raw sugar for March delivery fell 1.3 per cent to close at 14.68 cents a pound on ICE Futures US in New York, the biggest drop for a most-active contract since November 3.
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