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Journalism of Courage
Sugar prices have proved resilient even as investors lighten holdings in a reminder of buying patterns seen in 2006 when prices scaled 25-year highs,making potential for further gains all the more compelling.
ICE raw sugar futures almost doubled this year to hit a 28-1/2 year peak of 23.33 cents a lb on Aug. 12,and Liffe white sugar hit a record $589.90 per tonne on August 13.
As Indian buyers contracted raw sugar from Brazil to fill a huge shortfall,funds unwound substantial long positions into the rally,according to dealers and data from the Commitments of Traders report from the Commodity Futures Trading Commission.
Analysts said they had identified a repeat of a pattern during the last major sugar surge in Feb. 2006 when funds sold heavily into the rally to a then 25-year high of 19.73 cents.
In the past few days,the market has consolidated below the recent peaks,but remained well-supported by the tight global supplies and robust consumption of sugar.
Last week’s rise in open interest was the biggest since January 2008,Jonathan Kingsman,an industry consultant,said.
