Pool Update

Update as at 19 June 2018

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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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2017 Season Pool Prices (Pool valuation as at 14 June 2018)

2018 Season Pool Prices (Pool valuation as at 14 June 2018)

Forward Season Pool Prices (Pool valuation as at 14 June 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.

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Major Headlines

  • India is likely to export around 500,000 tonnes or just a quarter of the volume mandated by the government for overseas sales in 2017/18 amid higher prices at home. Indian sugar prices have jumped 20% over the past month thanks to government support measures currently trading at 31,000 rupees ($615 AUD) per tonne compared with exports which are being sold at world sugar prices- considerably less.
  • Lower shipments could support global prices but would increase India’s opening stocks for the next marketing season when output is expected to surge to a record. So whilst government policies are boosting domestic Indian sugar prices at the moment, another big season could send prices plunging again unless surplus sugar stocks are reduced. That could be addressed only by disposing stocks through exports.
  • Copersucar, the world’s largest sugar and ethanol seller expects smaller sugar production in the Brazilian centre-south region in the current season due to aging cane fields and drier weather and sees a more positive outlook for sugar prices. The company now expects sugar production from the current crop of 28 million tonnes compared with 36 million tonnes last year. Copersucar CEO Paulo Roberto de Souza told reporters there was heavy selling from producers in recent weeks when New York futures prices jumped and Brazil’s currency fell but that type of selling is less likely to happen in the future which would take some pressure off prices.
  • Crude oil prices rallied in London overnight after two weeks of losses, trading above $74 per barrel on news that OPEC is discussing a relatively modest production increase before it’s meeting in Vienna this week in an attempt to bridge the gap between Russia’s push for a big rise and Iran’s insistance that no change is needed.
  • If the rally in oil prices fades, this, combined with a weaker Brazilian real could keep sugar prices under pressure, even with potentially lower CS Brazil sugar production.
  • The AUD is currently trading very close to 12 month lows at 0.7404. China is Australia’s largest trading partner and a potential tariff driven trade war will likely have a number of mixed implications for the Australian economy and as such until the position becomes clearer, market players are likely to refrain from taking on risky currency positions such as the AUD.