If you binged on sugar last year, you are probably feeling sick.
Raw sugar futures have fallen for 12 straight weeks, the longest run since data on the contract begins in 1961.
While prices are about the same level as a year ago, it has been a huge swing up and down.
Photo: Reuters
The reasons are that a surplus is hitting the market and speculation that India, the world’s top consumer, would need to import the sweetener is not materializing.
It is a lesson in commodity-market volatility.
Last year, sugar was the best-performing raw material as forecasts for a deficit lured in speculators and hedge funds. This year, it is the reverse. Traders are exiting bullish bets and prices are down 20 percent, more than anything else in the Bloomberg Commodity Index.
“When you see a market inflating like a balloon, then, of course, what’s going up is also going down,” Platts Kingsman senior sugar analyst Claudiu Covrig said by telephone. “I was expecting this low, but how low can we go next?”
Raw sugar for July delivery fell 5.3 percent this week on ICE Futures US in New York.
On Friday, prices rose 1.6 percent to US$0.1567 per pound.
Speculators have been pulling out of the market and the net-bullish position is down from a record in September last year, according to data from the US Commodity Futures Trade Commission.
“Funds have an important capacity to move the market and this is what happened in the past two, three years,” Covrig said. “They are looking forward — and forward, we see a year of surplus.”
Output is poised to exceed demand by 3.14 million tonnes in the 2017-2018 season, according to Platts Kingsman.
Sugar quotas in the EU would also end later this year and producers are getting ready to unleash more supply even as consumption growth slows.
Prospects for extra imports from India are dwindling as Uttar Pradesh expects record output and lower domestic sales, according to Rabobank International.
Technical signals and poor sentiment also contributed to selling by funds this week, according to ADM Investor Services International.
Other commodities:
Gold for June delivery advanced 0.28 percent to US$1,269.40, down 1.12 percent from last week’s US$1,283.80. The metal rose 1.5 percent this month.
Nickel on Friday led a rally in industrial metals, rising 1.9 percent to US$9,510 per tonne.
Zinc gained 1.6 percent as workers at a Peru smelter called a strike.
In London, the white sugar contract rose 1 percent to US$450.80 per tonne, down 4.3 percent this week.
Cocoa rose 0.2 percent to US$1,872 per tonne in New York.
Arabica coffee was little changed at US$1.296 per pound and robusta coffee gained 0.5 percent to US$1,919 per tonne.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”