Sugar: At 20-Month Low

RAW SUGAR futures have plummeted to 18 cents per pound, the lowest since late October 2022, as market participants brace for a global surplus in the 2024/2025 season driven by robust supply. Despite the decline, major importers, including China, have found the prices appealing, reportedly securing large quantities at around the 18 cents mark. Meanwhile, India, ranking as the world’s second-largest sugar producer, is projected not to resume exports until the later half of 2025. Predictions suggest a decrease in India’s sugar output by 8%, totalling 33.7 million metric tonnes for the 2023/24 marketing year.

Wheat: In Full Bloom

WHEAT FUTURES have pulled back from a 10-month peak as traders assess the potential benefits of anticipated rainfall in key Russian growing areas on harvest projections. Previously, wheat prices soared to the highest levels since July following reductions in Russian harvest forecasts due to dry conditions and early frosts. At the start of this month, wheat reserves in India’s central pool, managed by the Food Corp. of India (FCI) and other state agencies, fell to 30.09 million tonnes — the lowest since 2008, stoking concerns of another price increase.

Cotton: Hitting A New Low

U.S. cotton futures have fallen below 75 cents per pound, retracting from a one-month high of 108 seen in May. The decline is attributed to favourable weather and falling crude oil prices. Despite a lack of rain in South Texas, other key cotton regions in Texas and Oklahoma have received above-average precipitation, exerting downward pressure on cotton prices. In India, cotton prices have slumped to a two-year low amid reduced demand, fueled by economic difficulties in major Western markets, especially the U.S. and U.K. Notably, cotton accounts for 65-70% of yarn production costs, which means even a modest 35% increase in cotton prices can lead to a significant 20% rise in yarn prices.