Shortage of sugar sees global price climb higherhttp://www.abc.net.au/news/2016-05-13/shortage-of-sugar-sees-global-price-climb-higher/7413484
May 16, 2016 at 4:13 PM
A realisation of a global sugar deficit, coupled with political turmoil in Brazil, has seen the sweet commodity continue to rally in world trade.
Overnight, the July supply contract for raw sugar closed at 16.98 US cents a pound, down slightly from its peak during trade of 17 cents.
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Sugar has been one of the best performing commodities this year, with the price rise largely attributed to a significant supply shortage.
"We're in a deficit year after five years of surplus," said analyst Tom McNeill, from Green Pool Commodities.
"Production is about 8.6 million tonnes below demand."
Political upheaval in Brazil, the world's largest sugar-producing country, has also been a key factor in the price volatility this year.
Brazilian president Dilma Rousseff was suspendedovernight and faces impeachment over accusations she broke budget accounting rules.
With the country in recession, the vote to remove Ms Rousseff has been welcomed by currency traders.
"That's seen to have given the Real, the currency, upward movement and it also gives some upside to the sugar price," Mr McNeill said.
"The ceiling has always been created by the level at which Brazilian producers will hedge their crop.
"And that's where the currency and the politics comes into it."
Mr McNeill suggested a further appreciation in the Real would help to drive continued price rises.
More money for Australian growers
After years of relatively poor returns, the global price movement is news Australian sugar producers have been longing for.
The current indicative price for the 2016 harvest pool is around $520 per tonne, a massive increase on the 2015 pool which yielded $383 per tonne.
"We haven't seen these levels for five, six, seven years, so it's actually boosting the potential of the industry to earn income," Mr McNeill said.
A depreciation in the value of the Australian dollar since late April has also helped boost prices for local millers and cane growers.
Australia is the third-largest supplier of raw sugar in the world, with production valued at more than $2 billion.
Volatility the name of the game
Dry growing conditions in Thailand and India have added to the global production shortfall, and traders are trying to predict what a potential shift to a La Nina weather pattern could mean for crops later in the year.
Mr McNeill said speculators and hedge funds had also played a more active role in the sugar market recently, retreating from other commodities.
"I think we'll continue to see a lot of volatility ... we'll see some lower prices, some higher prices," he said.
"But I suspect once this deficit hits towards the end of this year, early next year, that's possibly when the market will peak, and I wouldn't hazard a guess at where that will be."
May 24, 2017
It’s not this year’s price crash that haunts the $150 billion sugar industry. It’s the fear of worse to come. Raw sugar’s 16 percent drop ranks it bottom of the 22 raw materials on the Bloomberg Commodity Index. Shocks to demand in top consumer India and prospects of more European supply are helping shift the market to a surplus, hurting prices. Yet beyond such market dampeners, hang darker clouds. After decades of stable demand growth, almost doubling per person since 1960, the world is heading for a tipping point as shoppers turn against the cola and candy blamed for an obesity epidemic in the rich world. At the same time, sugar has to compete with cheap syrups increasingly used in processed food. "Growth is not what it’s been," Tom McNeill, managing director of Green Pool, said in an interview. "There is undoubtedly a move by global bottlers and by a lot of global food manufacturers to reduce the sugar content in their products."Read More
May 24, 2017
The "war on sugar" being waged by governments and consumers to combat public health emergencies like diabetes is slowing growth in global demand, which along with other factors could signal a fundamental shift in consumption ahead. Consumption may grow at its slowest pace in seven years in 2017/18, according to analyst group Platts Kingsman. It forecasts a rise of 1.04 percent, nearly half the average growth of about 2 percent per year over the last decade. "Consumption is generally stagnating in developed countries," Tom McNeill, director at commodity analyst group Green Pool, told Reuters.Read More
May 9, 2017
Global sugar exports will exceed demand this season and the next as India brings in less than expected and the European Union boosts output, according to Tropical Research Services, which advises hedge funds. Exports will beat import demand every quarter through September 2018, TRS estimates. The trade-flow surplus will total 398,000 metric tons in the third quarter, reversing a previous forecast for a shortage of more than double that amount, said Sean Diffley, the firm’s head of sugar and ethanol research.Read More
May 5, 2017
HOME COMMODITIES COMPANIES MARKETS OPINION DATA CALENDAR SUBSCRIBE Thurs 11th May 2017 PRINTABLE VERSION EMAIL TO A FRIEND RSS FEEDS 13:57 UK, 5th May 2017, by William Clarke Green Pool trims sugar deficit forecast, a touch... Sugar analyst Green Pool only slightly trimmed its forecast for a hefty sugar surplus next season, as consumption grows only sluggishly despite easing sugar prices. "Consumption is a major issue for sugar, with global consumption growing only slowly," Green Pool said. "Some growth is being seen in developing countries, while consumption is actually falling in some developed countries."Read More
July 1, 2016
The world is running short on sugar and the tighter supplies are driving prices to the highest in almost four years.Read More
July 1, 2016
Posted Thu at 11:54am Sugar being stored at one of Queensland Sugar Limited's bulk terminals PHOTO: The global sugar price has hit a four year high overnight. (Supplied by Queensland Sugar Limited) MAP: Mackay 4740 The global sugar price continues its strong rally this year, jumping 5 per cent in overnight trading in New York. It is currently buying 20.82 US cents a pound, its highest level since August 2012. A worldwide supply shortage plus a slow harvest in Brazil has seen sugar attract increased interest from investors.Read More
June 14, 2016
* Harvest weather returns to Brazil's sugar regions * Weak pound supports London cocoa By David Brough LONDON, June 13 (Reuters) - Raw sugar futures on ICE held steady on Monday near a 2-1/2-year peak with dealers focused on improving harvest weather in Brazil, while arabica coffee was little changed as worries over frost risks eased. A weakening pound, pressured by concerns over the coming British vote on EU membership, gave support to London cocoa. Raw sugar steadied, with a focus on improving conditions for the cane crush in centre-south Brazil. "The weather across Brazil's centre-south has improved markedly over the past few days as dry weather returns across the region allowing the crush to push into top gear again and port loadings to get back to normal," a broker said. Dealers noted that speculators again boosted the record net long position in raw sugar contracts on ICE they have held since early May in the week ended June 7, according to U.S. data.Read More
June 7, 2016
Marvin G Perez Fabiana Batista Megan Durisin This year’s rebound in oil prices has an unlikely victim: the dessert plate. To understand why, look no further than Usina Batatais SA, a sugar-cane processor in Sao Paulo. Enticing fuel margins mean the company is using a bigger cane crop to produce more ethanol, while keeping its raw sugar output unchanged. Even after sugar prices surged recently, “there’s no time and cane anymore” to make a switch, said Bernardo Biagi, Batatais’ president.Read More
June 2, 2016
* Coming up: Brazil Unica cane crush data due at 1300 GMT * NY July/September cocoa spread narrows By David Brough and Nigel Hunt LONDON, June 1 (Reuters) - Raw sugar futures on ICE fell on Wednesday before Brazilian cane data expected to show a strong crush for the first half of May, while cocoa eased in spread-related dealings. Coffee steadied, supported by concerns over a poor Brazilian robusta (conillon) harvest. Raw sugar dipped, moving away from Tuesday's 23-month peak, supported by a shift to a global deficit. Dealers awaited Brazilian data from cane industry group Unica at 1300 GMT, expected to show a rapid crush in early May. "We expect that the data will show a continued strong harvest in the first half of May. Our guess is that it will be close to 40 million tonnes of cane," said Tom McNeill, director of Green Pool Commodities.Read More
May 16, 2016
A realisation of a global sugar deficit, coupled with political turmoil in Brazil, has seen the sweet commodity continue to rally in world trade. Overnight, the July supply contract for raw sugar closed at 16.98 US cents a pound, down slightly from its peak during trade of 17 cents.Read More