Sugar prices to stay 'low-ish', says Green Pool, citing India's boomhttps://www.google.com/url?rct=j&sa=t&url=https://www.agrimoney.com/news/sugar-prices-to-stay-low-ish-says-green-pool-citing-indias-boom-68783&ct=ga&cd=CAEYACoTMTM5NDc2NjQ0NDkwNDAxODAzODIaYWRjNzdmM2E0ZDEwOTBiNzpjb206ZW46QVU&usg=AFQjCNH9V-jovILrSYPtazrSG2F104DtoQ
August 30, 2018 at 12:29 AM
Green Pool, highlighting India’s soaring sugar supplies, cautioned over the potential for prices of the sweetener to remain “low-ish”, even as it cut its forecast for output in many other producing countries.
The analysis group cut by 1.1m tonnes to 28.3m tonnes its forecast for sugar output from Brazil’s key Centre South region – a drop of nearly 7.8m tonnes year on year – citing mills’ scramble to maximise production of ethanol rather than sweetener from cane.
“The very low mix devoted to sugar is simply exceeding all historical norms, as millers pull out all stops to make the better paying hydrous ethanol,” Green Pool said, estimating at 1.95 cents a pound (in sugar terms) the price advantage of ethanol over sugar.
The forecast for European Union sugar output was also cut, to 17.70m tonnes - down 1.21m tonnes from the group’s June estimate, and a drop of 2.0m tonnes year on year.
The cut reflected reduced expectations for the region’s beet crop, thanks to dryness which has “frizzled” other crops too.
“While several months ago, weather for EU beet crops had appeared very good, ongoing hot, dry weather has now taken its toll on beet and sugar production prospects.”
Some switch to ethanol was seen playing a role here too, with EU output of beet-based biofuel rising from the equivalent of 1.39m tonnes in 2017-18 to 1.60m tonnes in 2018-19.
Other producers seeing output downgrades included Russia and Australia.
However, while meaning a reduced figure for the world production surplus, reduced by 2.38m tonnes to 4.24m tonnes, strong Indian output, upgraded by 300,000 tonnes to 33.5m tonnes, would ensure that a deficit was avoided.
‘Virtually ensures low-ish prices’
Without India’s second successive “massive [cane] crop, the 2018-19 global balance would be a 4.145m-tonne deficit,” in raw sugar terms, Green Pool said.
“India is front and centre in the market’s consideration of the next 12-18 months, which look to add to an already very high global stocks situation.
“That virtually ensures low-ish prices for some time yet.”
New York raw sugar futures for October stood at 10.39 cents a pound in morning deals on Thursday, up 0.2% on the day, but remaining close to the 10-year low of 9.91 cents a pound set last week.
India’s strong sugar output prospects - forecast by many commentators taking it to top rank in world sugar production, overtaking Brazil – reflect state support, Green Pool said.
“India’s government is doing all it can to boost farmer incomes,” although in a policy which, in being based around guaranteed cane prices, “has left millers in an almighty stew as a result.
The government has “now taken to promising ethanol production subsidies, export subsidies, cane subsidies and minimum prices for ex-mill sugar” in a bid to support mills facing elevated raw material costs.
February 1, 2019
The world sugar market is on course for a shortfall of 1.36 million tonnes (raw value), analyst Green Pool said on Friday in its first forecast for the 2019/20 season.Read More
February 1, 2019
World sugar production will fall behind consumption in 2019-20 for the first time in three seasons, and by the most in four, Green Pool said, terming the forecast a “positive for the market”.Read More
November 29, 2018
Analyst Green Pool said on Wednesday it had raised its forecast for an anticipated global sugar surplus in the 2018/19 season to 3.60 million tonnes, raw value, from a previous projection of 3.22 million.Read More
August 30, 2018
Green Pool, highlighting India’s soaring sugar supplies, cautioned over the potential for prices of the sweetener to remain “low-ish”, even as it cut its forecast for output in many other producing countries.Read More
August 12, 2018
Changing consumer tastes raises the possibility of a long-term reduction in demand even as the world’s largest producers are notching record production. Green Pool Commodity Specialists, a consultancy, projects a 19 million-ton surplus this year, the largest ever.Read More
July 9, 2018
Surging ethanol stockpiles and tumbling prices for the biofuel risk bringing back more sugar production in top grower Brazil. “Prices have been coming down, ethanol stocks are building. Demand is strong but is probably not sufficient to clear the stocks,” said Tom McNeill, a director at Brisbane, Australia-based researcher Green Pool Commodity Specialists. “I think this assumption that everyone has made that maximum ethanol is absolutely locked in could be challenged within the next three months.”Read More
May 4, 2018
July raw sugar settled down 0.06 cent, or 0.5 percent, at 11.69 cents per lb. Focus remained on a global supply glut, with commodity analyst Green Pool forecasting a combined sugar surplus of almost 25 million tonnes for the 2017-18 and 2018-19 seasons.Read More
May 3, 2018
The world’s sugar traders are experiencing the biggest ever global surplus. That’s according to Green Pool Commodity Specialists, which expects the glut to reach 18.4 million metric tons this season. The Brisbane, Australia-based researcher boosted its estimate by almost a quarter because of a massive increase in the sugar-cane area and yields in India, the No. 2 producer.Read More
May 2, 2018
For sugar, there’s no sweet ending in sight after a long period of declining prices. Australia-based consultancy Green Pool recently upped its surplus estimate by 43% to almost 15 million tons. The International Sugar Organization, the global trade body, sees a surplus of 5.2 million tons.Read More