Sugar Futures Slip to Over 3-Week Low

US sugar futures slipped over 6% to trade below 19 cents per pound, their lowest since late September, pressured by lower oil prices and a weaker Brazilian real following the presidential election results. Cheaper oil may reduce ethanol’s competitiveness, encouraging mills to allocate more sugarcane to sugar production, while a weaker real makes Brazilian exports more competitive in international markets. In Brazil’s Center-South region, improved weather has allowed harvesting and milling to resume after recent rains disrupted operations, raising expectations of greater short-term supply. However, UNICA data showed that cumulative cane crushing through August rose 1.8% year-on-year, while sugar production fell 10.3% as mills allocated a larger share of cane to ethanol. Meanwhile, India, the world’s second-largest sugar producer, is expected to have a smaller crop than a year earlier, as a powerful El Niño contributed to one of the weakest monsoons in more than a decade.