Guangfa Futures: White Sugar Shows Divergent Trends

As Brazil enters its peak production period, fund purchases are becoming more cautious. At the same time, the current high prices are a test for importing countries, as the lack of import profits has led to lower-than-expected purchases from Indonesia and China in the first quarter, which has had a drag on raw sugar prices. However, given Brazil’s logistics bottlenecks and the potential for speculation due to El Nino, it is expected that raw sugar will maintain a high and volatile pattern, with support remaining strong at 24-25 cents/pound. Spot prices remain strong and sales in the region are still normal, with some aggressive traders even increasing their purchases during price declines. While the inventory situation of some large price-setting traders is good, most small and medium-sized traders have low inventory levels. However, with reduced production and high sales rates, there is not much pressure on sugar mill inventories at present. It is expected that sugar prices will be mainly strong this week with high volatility.