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Sugar Hovers Above Lowest Level Since November 2015

Summary:
Sugar futures are posting modest gains towards the end of the trading week, but they are still hovering just above their lowest levels in more than two years. The white commodity is benefiting from investors taking advantage of lower prices, but producers continue to limit their output volumes. May sugar futures rose 0.08 cents, or 0.65%, to 12.35 cents per pound at 16:29 GMT on Thursday on the US ICE Futures Exchange. Last week, sugar prices settled at their worst levels since November 2015. Year-to-date, sugar has tumbled more than 18%, and traders are not anticipating a bull market anytime soon. With the latest weakness in sugar prices, there has been an increase in investors buying contracts. As the demand inches higher, producers, who have reduced output and sales in the bear market,

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Sugar futures are posting modest gains towards the end of the trading week, but they are still hovering just above their lowest levels in more than two years. The white commodity is benefiting from investors taking advantage of lower prices, but producers continue to limit their output volumes.

May sugar futures rose 0.08 cents, or 0.65%, to 12.35 cents per pound at 16:29 GMT on Thursday on the US ICE Futures Exchange. Last week, sugar prices settled at their worst levels since November 2015. Year-to-date, sugar has tumbled more than 18%, and traders are not anticipating a bull market anytime soon.

With the latest weakness in sugar prices, there has been an increase in investors buying contracts. As the demand inches higher, producers, who have reduced output and sales in the bear market, may need to renew their practices again. Analysts also warn that sugar producers will likely lower their price targets.

Over the last 12 months, there has been a shifting balance from a deficit to a global supply glut.

In December 2017, experts projected that sugar would be the worst performing commodity this year. The forecast came soon after the International Sugar Organization (ISO) predicted that sugar supplies would be 4.6 million tons higher than demand.

Meanwhile, the sugar industry is looking ahead to a new tax on sugary beverages coming into effect in Great Britain on April 6. Under the new law, which is meant to curb obesity, sodas with more than five grams of sugar per 100ml will face a levy of 18p (25 cents) per litre. This means manufacturers will only have two options: risk lower sales or decrease sugar volumes – the latter may not bode well for sugar farmers.

Other agricultural commodities are rallying on Thursday. May soybean futures rose $0.1375, or 1.35%, to $10.29 per bushel. May wheat futures advanced $0.09, or 1.97%, to $4.647 a bushel. May coffee futures jumped $0.004, or 0.34%, to $1.1173 per pound. May orange juice futures slumped $0.018, or 1.30%, to $1.3705 per pound.

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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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