Over the last 3 year, India has seen the worst weather conditions. The country’s food sector is in jeopardy. Extremely dry and hot weather keeps affecting multiple crops including rice, sugarcane, tea, coffee beans etc.
India is one of the major producers of sugar in the world. Due to this year’s poor harvest of sugarcane and lower production of sugar, India decided to reduce the export of the sweet product.
India has seen rains for 2 months. 50% of India’s crops are in jeopardy. The similar situation was seen in 2009. At that time, the Indian government reduced the export of sugar, rice and wheat. If the supplies of these products are unstable, we will probably see the prices rocketing sky high.
Yesterday, sugar prices fell. The NYMEX sugar futures for October delivery closed at $0.22 per pound on August 6th, which was -4 cents as compared to Friday’s prices.
Previously, we warned that India might cut its sugar production down to 24 million tons in the new harvesting seasons (starts on Oct 1st).
The price of the sugar futures keeps declining, reports. The closest level of support is located at 21,32 (38.2% Fibo). A trend reversal will become probable if the price overcomes the top of the mF sloping channel and consolidates above the MF pivot (ash shown below):
