Pool Update

Update as at 29 November 2018

The information and views expressed in this report are those of the writer and do not necessarily reflect the views of MSF
Sugar. While all care is taken in the preparation of this report the reliability or accuracy of the information provided in the document is not
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2018 Season Pool Prices (Pool valuation as at 29 November 2018)

Forward Season Pool Prices (Pool valuation as at 29 November 2018)


Net AUD/T (IPS) subject to change with changes in the ICE 11 market price affecting unpriced exposures, movement in the AUD/USD exchange rate and also due to  movements in the Shared Pool.


Major Headlines

  • Prospects for sugar are tied firmly to those of oil at the moment as OPEC and it’s allies deliberate whether they will cut oil production in order to stabilise prices which have shed $25 per barrel since early October. The world is awash with oil and OPEC’s de facto leader Saudi Arabia have stated reducing production by 1m barrels per day would be adequate to arrest oil price decline.
  • A key question for OPEC if it goes ahead with cuts is how they are divided between cartel members and its ally Russia, which is reluctant to make a big reduction. Most of the curbs would be expected to come from Saudi Arabia, the UAE and Kuwait, and to take effect for six months from 1 January.
  • Assuming Russia gets on board with cuts which are then implemented from Jan 1 oil prices would be expected to strengthen over first half 2019. Brazil will commence their next harvest in April/May so a rallying oil price will encourage ethanol production over sugar which will reduce global sugar production. It seems the prospects for oil and sugar rest in the hands of Vladimir Putin…
  • Sugar production in India to the end of November was similar to the same period last year. Whilst it’s early days this could indicate a crop of similar proportions to last year which produced 32.5m tonnes fo sugar. Estimates for this crop are 30-32m tonnes.
  • The Australian Dollar is currently trading around 0.7235 with the US Dollar.