Pool Update

Update as at 5 October 2018

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2018 Season Pool Prices (Pool valuation as at 4 October 2018)

Forward Season Pool Prices (Pool valuation as at 4 October 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

  • It has a been a volatile few days for the sugar market. Prices recorded heavy losses last week on the back of the Indian government’s announcement of sugar export subsidies before rebounding strongly this week seemingly due to speculator driven buying coinciding with the new financial quarter. Other commodities recorded similar gains this week; crude oil, grains and coffee.
  • The March-19 contract fell to 10.80 following the Indian announcement however has strengthened to close Thursday’s session at 12.33 c/lb. Futures prices have also risen with today’s indicative prices as follows; 2019 $382/mt, 2020 $414/mt, 2021 $421/mt.
  • Given the rise in sugar prices most analysts now believe the market has surpassed Indian export parity i.e. Indian millers can now sell sugar on the world market with the government transport subsidy and cover their costs. The incentive to export will grow stronger as world prices increase – and as new stocks start rolling in with the new harvest. Probably the threat of Indian exports will be enough halt this market rally for the time being.
  • The Brazilian Real has strengthened against the USD currently trading around 3.87 after peaking at 4.20 in September. The Aussie dollar has weakened against the USD currently trading at 0.7065 – the lowest since early 2016. The BRL movement makes exports less attractive for Brazilian millers and the opposite true for Aussie exporters.