Brazil sells record volume of sugar through New York futures

Brazilian sugar mills have sold forward through futures contracts in New York 45.8 percent of the exportable volume projected for the 2017/18 center-south crop, a record volume, Sao Paulo-based Archer Consulting said on Friday. The amount of sugar hedged is 12.1 million tonnes, said the consultancy in a report, adding that the average price on those derivatives was 17.54 cents per pound.
Mills have been keen to fix prices in New York since the average values in dollars when converted to Brazilian reais guarantee a return considered favourable. Archer said hedging both on sugar and on the local currency is indicating an average price of 1,538 reais per tonne of sugar. The report said the average price in reais currently is 21 percent above the average value in the last crop (2016/17) and 62 percent higher when compared to the 2015/16 crop, as two years of global sugar supply deficit boosted values. The new center-south cane crushing season will officially start in April, but many mills are expected to begin harvesting early, around March.