Pool Update

Update as at 16 Dec 2020

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2020 Season Pool Prices (Pool valuation as at 3 Dec 2020)

Forward Season Pool Prices (Pool valuation as at 3 Dec 2020)


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

  • During the month of November, the Mar-21 ICE11 futures contract traded to a high of 15.66 cents per pound as speculators bid the price higher on the back of an improved macroeconomic environment, Indian subsidy uncertainty and La Nina fears in Brazil.
  • Over the past couple of weeks speculator bullishness has eased with an announcement from the Indian government on subsidies apparently imminent (expected 16/12) and rainfall across Brazil easing weather concerns for the 2021 crop. As a result, the price has fallen back to just above 14 c/lb.
  • India, the consensus amongst market commentators is that the Indian government will confirm a 2020/21 season export subsidy of USD 82 per metric tonne for 6 million tonnes of exports. The Indian domestic sugar price is mandated by the government is fixed at around USD 432/MT. This means that Indian millers would commence exporting when the combined value of the ICE11 and the export subsidy matches the Indian domestic market. This point is about 15.8 cents per pound. If Indian exporters can negotiate a premium with their customers, this ICE11 point would reduce further.
  • La Nina concerns in Brazil have eased with good rainfall across the Centre South area where harvesting operations have recently concluded. This too has prompted speculators to reduce their long position with Brazil expected to turn a significant portion of their 2021 crop to sugar production rather than ethanol given current weak oil prices and weakness of the Brazilian Real which means sugar returns are superior to those of ethanol. Unless oil prices improve to more like USD60 per barrel or sugar nose dives Brazilian millers will focus on sugar output in 2021.
  • Most analysts forecast a global sugar surplus of between 2 and 4 million tonnes of sugar in 2020/21 – this assumes up to 6 million tonnes worth of exports from India with the assistance of a government subsidy.
  • The Australian dollar has been strong against the USD as election aftermath and Covid continue to cause havoc in the US. Currently trading above 0.75.