Raw sugar prices rose briefly after the U.S. Supreme Court struck down global tariffs imposed by former President Donald Trump, a decision that could open the door for top producer Brazil to send more sugar and ethanol to the United States, Business Mirror reported.
The most-traded sugar contract in New York gained up to 2.3 percent, touching its highest level in nearly two weeks before easing from that peak.
Market analysts said the removal of tariffs may allow Brazil to increase exports of cane-based ethanol to the US. Claudiu Covrig of Covrig Analytics said this could encourage Brazilian mills to use more sugarcane for ethanol production instead of sugar.
Sugar producers have been seeking better returns as global supplies remain high and demand stays weak, pushing sugar prices lower and reducing profits from the sweetener.
However, any rise in Brazilian shipments is expected mainly in the second half of the year. Mike McDougall of McDougall Global View noted that Brazil has also been importing more fuel for domestic use. He added that removing the tariffs could still support global sugar prices if more Brazilian sugar is directed to the higher-priced US market.
In coffee trading, arabica futures initially fell by as much as 1.6 percent after the court’s decision before recovering and moving higher.
Coffee broker Thiago Cazarini said prices had already adjusted last year when tariffs on coffee beans, including those from Brazil, were lifted. He said the latest ruling could make buying decisions smoother and provide some relief to coffee roasters.
The Supreme Court did not rule on whether importers would be refunded for tariffs already paid. Trump has said he has an alternative plan ready.
