SO, IN SHORT ALL SEEMS OK, SUPPLY WISE, BUT THERE ARE UNCERTAINTIES, AS USUAL, FOR COMING CROPS, LIKE INDIA (ACREAGE AND MONSOON) WHILE THERE IS OPTIMISM FOR THAILAND (HIGHER ACREAGE AND BETTER WEATHER).


When comes to Sugar exports, is not all about the supply, but also politics, as India stopped sugar exports to help dealing with higher inflation. Until there are “clues” on how the coming crop will be, one can’t be too sure if any excess of “juice” would turn into Sugar and be allowed to be exported or turn into Ethanol for the domestic market.


India managed to reach 7,5% ethanol blend for the domestic fuel needs in 2023 and aims to reach 20% in the coming years. If the new policies remain the current one i.e. ethanol production, then sugar exports may be very limited to just tolling (Refined out of imported Raws). Time will tell, but attention is required.


It may be fair to say that many Indian Mills are listed in the India Stock Exchange and could gain value more easily with a strong and long-term Fuel policy i.e. Juice for Ethanol!


So, these are the key fundamentals to deal with. When we look at the Funds/Specs shorts in Sugar we need to see what they are also doing elsewhere.


They were aggressively short in Corn, Soybeans and Wheat, well into the US, EU and CIS planting/crop developments (not normal) so the fact they are also short Sugar is no surprise.


We estimate Sugar Consumers (Industrial firms, Refineries etc…) still need to buy/price close to 30/35% of their needs for 2024 and Producers need to price/sell close to 25% so, they seem in a similar situation.


One thing to bear in mind is that Consumers tend to be far more short term orientated when comes to fulfil their needs and Producers would be looking at the long term with far greater intentions, given the risk (crop on the ground) they carry.


Alberto Peixoto E: albertopeixoto@apcommodities.london T: +44(0) 7570 714 981


9 | ADMISI - The Ghost In The Machine | Q2 Edition 2024


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