Brazil: The drop in sugar futures contracts reflects the devaluation of the real

Sugar futures contracts fell sharply on Tuesday (17), impacted by the significant devaluation of the Real. According to analysts, the weak currency encourages Brazilian mills to increase their sales of futures to maximize gains in local currency. At ICE Futures in New York, raw sugar due in March 2025 reached its lowest price in three months, trading below 20 cents per pound. The most liquid contract was traded at 19.84 cts/lb, a drop of 84 points (4.1%) compared to the previous close. The contract due in May 2025 fell 67 points, to 18.53 cts/lb. Other maturities also fell, with variations between 11 and 49 points. According to a North American broker consulted by Reuters, the main reason for the drop in prices was the devaluation of the Real. “The Brazilian currency hit a historic low against the dollar in the morning, reflecting concerns about the country’s fiscal situation and the Central Bank’s frustrated attempts to contain the decline,” the expert highlighted. In addition to ...