WELL, WE KNEW THAT, RIGHT? As producers see no reason yet to hit the market “hard”, the selling is thin and mostly on a scale-up basis and as we have seen with other commodities, when producers are not “keen” to sell, then the market is vulnerable to higher prices.


WE ALSO NEED TO KEEP REMINDING OURSELVES THAT MOTHER NATURE IS STILL FULL OF SURPRISES AND WITHOUT GOOD WEATHER, WE CAN’T GET GOOD CROP.


The Sugar S & D is balanced for April/March 23/24 in our opinion. Some expect a small deficit, but the main difference is how one estimates demand. As there are no statistics for sugar demand, one has to evaluate the flow from A to B, as well as stock levels (also not easy to access) and then estimate what demand is like.


Higher sugar prices and higher costs (interest, freight etc.) have triggered a de-stocking where possible and by now one would expect that stocks are at bare levels.


The overall trade flow (from producers to consumers) dropped during the 2nd and 3rd quarters of 2023 and we are likely going to end 2023 at a lower level than


2022.


HAVE WE REACHED THE BARE MINIMUM TRADE FLOW? Well, in our opinion, anyone who could buy less and delay buying has done it, therefore 2024 may be similar to 2023 at worse case.


When it comes to sugar exports, as the Indian government is not allowing exports, at least not for now and India’s sugar production for 2023/24 not being much stronger than domestic needs, the world will need to seek greater imports from other sources.


Thailand had a good cane crop during Nov 22/Sept 23, which yielded 2.5 mln m/t more sugars, therefore they had more to export. As we go into 23/24, the total cane crop is expected to drop and total sugar production end up 2 to 3 mln m/t less. For every kilo Thailand doesn’t produce, Thailand will not export.


Australia will end their 23/24 (June/May) harvest soon and based on the estimated cane availability (-5.79%) and despite the higher sugar content (+4.50%) the overall sugar production will be marginally down from last year and therefore the export surplus will not be higher.


Central and South America are expected to have similar overall productions and therefore total exports may not be much different from the year before.


When comes to beet producers like the USA, EU and the CIS, they are having a good year with higher crops they will therefore need to import less and like Russia export a bit more than last year but to their neighbours.


10 | ADMISI - The Ghost In The Machine | Q4 Edition 2023


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