Sugar price recovers slightly from 7-year low

Sugar has been faring comparatively well despite the sell-off of commodities, but nonetheless dropped on Monday to a seven-year low of a good 10 US cents per pound.

The price gained by 2% yesterday and closed at 10.6 US cents per pound, notes Commerzbank. The price rise was triggered on the one hand by the interest rate cut by the Chinese central bank, which helped virtually all commodities to recover.

On the other hand, the price was able to profit from rain forecast for the sugar cane growing regions in Brazil, the largest producer country. This is because the sugar cane processing season is currently underway in Brazil and requires dry weather conditions. Fears that the El Niño weather phenomenon could hamper sugar production in India and Thailand lent additional support to the price.