ALL EYES ON BRAZIL?


As we reach the middle of 2021 the pandemic continues to rage across the many regions of the globe and is still bringing misery and tragedy to millions of people. The light at the end of the tunnel has been a long time coming as new variants of the virus appear and the vaccination programme has stuttered in many regions. Nevertheless, the world has slowly untethered from the restrictions and with that has come economic revival and growth.


Demand for commodities, in general, has dramatically increased, resulting in rocketing prices and the continuing talk of a commodity super-cycle developing. The scourge of inflation has reared its head fuelling things further. Sugar has been caught up in all the excitement underpinned by bullish fundamental sentiment. At the beginning of the year prices had reached nearly 16 cents as the funds bought, it remained dry in Brazil and the Indian government had not announced their export policy for the season.


Fast forward nearly six months and prices have improved further. Indeed, back in February, prices hit their highest level in nearly 4 years reaching just shy of 19 cents. Since then the market has fallen back to below 15 cents before rallying twice to over 18 cents. A combination of fund buying, a continuing drought in Brazil’s CS and general uncertainty has seen the market remain volatile.


A lack of producer selling has also exaggerated the rallies after Brazilian mills priced much of their exports for 2021 when the BRL was weak and prices pushed above 13 cents.


The Indian government eventually announced their export policy some four months after the beginning of the season. This prompted many to assume that they would never be able to fulfil the target of six million tonnes of exports. However, their export campaign has been remarkably successful with this export target probably hit by now. Exporters have been aided by low exports from Thailand after a disastrous season when production barely reached 7.5 million tonnes which was nearly half the amount produced just two seasons earlier. India has managed to plug the supply gaps in a season that has seen a small deficit in global production. Total Indian sugar production this season has reached just under 31 million tonnes and the prospects for next season is just as good if not better


6 | ADMISI - The Ghost In The Machine | Q2 Edition 2021


A LACK OF PRODUCER SELLING HAS ALSO EXAGGERATED THE RALLIES AFTER


BRAZILIAN MILLS PRICED MUCH OF THEIR EXPORTS FOR 2021.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28