why are sugar prices going down, impact china currencies- Sugar Futures Prices Thursday August 20 2015 : Asian emerging market currencies are taking more of their near-term direction from Chinese market anxiety, so any lift to sugar prices may be limited at best.
China's decision to introduce a more market-based exchange rate to its currency, lowering the value of the yuan against the dollar, makes dollar-denominated imports more expensive for China. China is the world's largest importer of raw sugar, followed by Indonesia, which has seen the rupiah decline 3% against the dollar since Aug. 10
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White sugar futures dropped for the fourth straight session to a 6-1/2-year low on Thursday, as refiners sold into the whites-over-raws premium, White sugar prices fell sharply as refiners locked in sales before the steep premium over raw sugar prices dissolved.
Raw sugar for October delivery fell 0.9% to 10.50 cents a pound on the ICE Futures U.S. exchange. October white sugar settled down $5.60, or 1.7 percent, at $333.60 a tonne, after touching a 6-1/2-year low of $329.00.
The premium of white sugar over raw sugar rose to more than $120 per tonne on Aug. 11, prompting refineries to sell and pushing the price of whites lower, brokers said.
"The premium jumped up, then the refineries sold and the market collapsed," one broker said, referring to heavy selling of the whites this week and the October whites premium falling back below $100 per tonne on Thursday for the first time in three weeks.
Another broker said: "Refiners have taken advantage of the recent strength in the premium so high quality whites availability should increase," the broker added.
Heavy selling briefly brought the October white contract to a discount against December for the first time in five weeks.
October raw sugar futures settled up 0.03 cent, or 0.3 percent, at 10.62 cents a lb, turning higher after falling to a session low of 10.44 cents. This is within sight of an Aug. 10 seven-year trough of 10.37 cents a lb, pressured by huge global stocks.
The International Sugar Organization said Thursday that China is on track to reach record raw sugar imports for the year ended Sept. 30, with high internal prices for sugar and lower-than-expected production. From October to June, China has imported just under 3.4 million metric tons of raw sugar versus 3.3 million metric tons over the same time period last year. The ISO is predicting China will import 4.5 million metric tons this year, a record, and that it will break that record again next year, importing 4.6 million tons.
China is the isolated bullish story in the bigger picture," said Guilherme Kfouri, senior economist at ISO. "India has had a record year of output. We have good production in Thailand. Even Brazil, where we had a drop in production, it isn't enough. The market is oversupplied. You have more bearish factors than bullish ones."
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