Pool Update

Update as at Tuesday 5 December 2017

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
guaranteed. MSF Sugar does not accept any responsibility to any person for the decisions and actions taken by that person with respect
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2017 Season Pool Prices (Pool valuation as at 30 November 2017)

IS Pools

Forward Season Pool Prices (Pool valuation as at 30 November 2017)

FS Pools

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

  • The Sugar price advance has slowed and prices are now trading either side of 15 US cents per pound as the market awaits new fundamental developments.
  • Prices seem balanced with Producers less inclined to sell below 15 cents, while Speculators seem less inclined to buy above 15 cents.
  • The switching of cane between sugar and ethanol production is expected to play a large role in determining how much sugar will be produced in Brazil next season. Ethanol prices and demand remain strong in Brazil, as world energy prices gain momentum, which is suggesting a swing of 2% to 4% of cane away from sugar production.
  • The Lower House of the Brazilian Congress has approved the RenovaBio legislation, which amplifies and formalises the use of biofuels. It now moves to the Senate. The legislation will increase Anhydrous ethanol in Gasoline to 30% by 2022 and 40% by 2030 (currently 27.5%).
  • Rainfall in Brazil’s centre south continues to slow at the tail end of the crush. While this is reducing short term availability, it is also improving the prospects for next year’s cane production.
  • The northern hemisphere crush is proceeding without any material challenges.
  • White sugar premiums are under pressure with surplus European Union production expected to increase availability.
  • According to the most recent Commitment Of Traders (COT) report, Speculators now hold a most net Long or Bought position of 12,325 lots.
  • The Australian Dollar decline has slowed, with commodity prices providing some support. Iron Ore, a significant source of foreign currency, has advanced 16% in the last 2 weeks.
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