By Alison Sider
Sugar futures extended losses Tuesday after reports that Brazil's agriculture minister said the country is considering lifting a tariff on U.S.-produced ethanol, raising concerns about additional supplies of sugar pressuring the market.
Raw sugar for March settled down 1.25% to 13.42 cents a pound on the ICE Futures U.S. exchange. On Tuesday, sugar shed 4.2%.
Brazil is looking at removing a 20% tariff on ethanol imports from the U.S., according to media reports.
"This appeared to trigger selling in Sugar as more cane can now be processed into sweetener," Jack Scoville, vice president at Price Futures Group, wrote in a client note Wednesday. "Price action had been strong due to the strong demand for ethanol that has diverted some Brazil mill production away from Sugar."
Lifting the tariff would mean "supply would be abundant," said Joe Recupero, vice president at R.J. O'Brien.
In other markets, Arabica coffee for March delivery rose 2.2% to $1.231 a pound, recovering from the previous day's losses.
"Right now there's a lot of ideas that maybe the market's gone down far enough," Mr. Scoville said of coffee.
March cocoa settled up 2.74% at $1,985 a ton, March frozen-concentrated orange juice lost 0.28% to $1.400 a pound and March cotton rose 0.87% to 82.14 cents a pound.
Write to Alison Sider at alis[email protected]