The price of raw sugar is falling alongside energy prices and as demand in China weakens.
Raw sugar’s price declined 2% to 13.59 U.S. cents per pound on June 18, after reaching a nearly two-month low of 13.56 U.S. cents earlier in the week.
Lower energy prices are impacting cane mills and reducing ethanol fuel production, which is exerting downward pressure on sugar’s price.
The price of crude oil has fallen below $80 U.S. a barrel after America and Iran reached a deal to reopen to Strait of Hormuz waterway to commercial shipping.
At the same time, China, the world’s top sugar importer, brought in 37% less sugar in May compared to the same month last year, according to economic data.
There are also growing concerns about weather disruptions to sugar production this year.
A Super El Niño weather pattern is forming in the Pacific Ocean that analysts say could impact commodities in this year’s second half.
Weather disruptions could ultimately be supportive of raw sugar’s price and prevent worsening declines this year, say some analysts.
Raw sugar is a coarse, golden-colored sweetener made from sugarcane. It is typically refined into white sugar that is sold to consumers at grocery stores.
