Sugar price pulled back further away from the seven-month high of $20.45 cents as falling oil prices increased the opportunity cost of using cane feedstock to distill ethanol, driving producers to increase the crush of sugar. On the other hand India, which is one of the main producers, lowered the export quota for the 2022/23 marketing year. Authorities will allow exports of 6 million tons of sugar until May 2023, which is nearly half the amount compared to the previous year. Also investors try to assess supply expectations for top producer Brazil amid the possibility that president-elect Lula could increase the country’s fuel price cap after the new year further supporting prices.
From technical point of view, price broke below lower limit of the local descending channel and is currently approaching key support area around $19.00, which is marked with previous price reactions, and 50.0% Fibonacci retracement of the last upward wave. Should break lower occur, downward move may deepen towards next support at $18.65.
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SUGAR, H4 interval. Source: xStation5
