Abundant supplies are projected to reduce the price of sugar futures this year to 18 cents per pound, a top official with an investment house told Bloomberg.
Managing director Carlos Murilo Barros de Mello with Macquarie Brasil Participacoes said the bearish trend for the sweetener is projected to last through the end of the year as a surplus of the sweetener makes its way toward the market. He also pointed to damages wrought on banks by the sovereign debt crisis ravaging the euro zone.
"The crisis in Europe is impacting banks there as they have to move money back to their home countries to cover losses that are appearing in their balance sheets," the managing director told the news source. "National governments are pressuring European banks to finance their local economies and therefore they take money out of commodities and emerging markets."
At 9:36 a.m. on Monday, sugar futures climbed 0.92 percent, a 0.22 cent gain to 24.16 cents per pound.
Reuters reports the export of sugar from India, a key nation for the international trade of the sweetener, is likely to gain.
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