SUGAR IS SPARKLING AMONGST AGRI
SO, HOW IS THE SUGAR S&D
LOOKING AHEAD? We had some crop disappointments in 20/21 in Thailand, Europe, CIS this was alongside others that didn’t change much including Australia, Central America etc… The highlights in terms of higher crops were Brazil and India in 20/21.
COMMODITIES
The Commodity boom we are experiencing today, triggered by risk diversification and weaker Dollar is being supported by fundamentals to a certain degree, like the weather and still strong demand.
Sugar has been one of the main beneficiaries of the investment flow and the lack of producer selling for 2021 (plenty done from mid-2020) is allowing prices to stay strong. Consumers have been absorbing any major sell offs as they get on with their demand requirements and pricing.
BRAZIL SUGAR STOCKS FOR END OF APRIL 21 WERE ESTIMATED AROUND 3 MLN M/T VS. 4,3 MLN M/T BY END OF APRIL 20.
Consumption saw a number of disruptions due to lockdowns and economic downturns, as well as a shift from industrial demand to retail, and although expected by many, the overall world sugar consumption wasn’t destroyed with the lockdowns.
We estimate that sugar consumption dropped 0,79% during April/March 20/21 and may drop 0,13% during Oct/Sept 20/21. Given the production for these periods, we estimate a 1 mln m/t surplus during April/March 20/21 and 3,2 mln m/t deficit during Oct/Sept 20/21.
When we look ahead, based on our expectations for acreage and weather (which are both still very volatile) we expect less than 1 mln m/t surplus during April/March 21/22 and 500k m/t surplus Oct/Sept 21/22, with both periods having a potential downside!
The Brazilian cane crop which started slower and has downside due to the prolonged reduced rainfall during November 20 to May 21, will as usual be impacted by the Real and Gasoline prices, affecting Miller’s decision on the Sugar Mix. Current cane crop estimates range from a pessimistic scenario 530 mln m/t with most optimistic at 570 mln m/t. In terms of sugar production, depending on ATR and sugar Mix, estimates range from 31 to 36 mln m/t vs. 38,4 mln m/t.
Brazil sugar stocks for end of April 21 were estimated around 3 mln m/t vs. 4,3 mln m/t by end of April 20. Given the lower carry in stocks and expected lower sugar production, Brazil would have 3,4/8,4 mln m/t lower exportable capacity. Brazil exported 32,1 mln m/t during April/March 20/21 vs. 18,9 mln m/t during April/March 19/20.
THE
BRAZILIAN CANE CROP WHICH STARTED SLOWER AND HAS DOWNSIDE DUE TO THE PROLONGED REDUCED RAINFALL DURING NOVEMBER 20 TO MAY 21.
18 | ADMISI - The Ghost In The Machine | Q2 Edition 2021
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