1 / 31

World Sugar Market Outlook

2009 Int. Sweetener Colloquium 8-11 February 2009 Orlando. World Sugar Market Outlook. Stefan Uhlenbrock F.O. Licht Commodity Analysts Ratzeburg, Germany. World Raw Sugar Prices: NY #11 Cents/lb. 15.07. 9.52. Key factors of price formation Speculative activity

gunther
Download Presentation

World Sugar Market Outlook

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2009 Int. Sweetener Colloquium 8-11 February 2009 Orlando World Sugar Market Outlook Stefan Uhlenbrock F.O. Licht Commodity Analysts Ratzeburg, Germany

  2. World Raw Sugar Prices: NY #11 Cents/lb 15.07 9.52 International Sweetener Colloquium, 8-11 February 2009, Orlando

  3. Key factors of price formation • Speculative activity • Crude oil and commodity prices in general • Energy policy • Sugar policy • Freight rates • Exchange rates • Interest rates • International Trade Policy and Agreements • Inflation • Political reform International Sweetener Colloquium, 8-11 February 2009, Orlando

  4. ICE Non-Commercial Futures Position and Total Open Interest (1,000 contracts) Open interest long/short long short International Sweetener Colloquium, 8-11 February 2009, Orlando

  5. 2007/08 Another year of surplus What about 2008/09? International Sweetener Colloquium, 8-11 February 2009, Orlando

  6. World Raw Sugar Prices: NY #11 Cents/lb 11.81 11.75 10.82 International Sweetener Colloquium, 8-11 February 2009, Orlando

  7. World Sugar Production mln tonnes, raw value Feb 2, 2009 International Sweetener Colloquium, 8-11 February 2009, Orlando

  8. World Sugar Balance mln tonnes, raw value Feb 2, 2009 International Sweetener Colloquium, 8-11 February 2009, Orlando

  9. Key market drivers International Sweetener Colloquium, 8-11 February 2009, Orlando

  10. Ethanol: The wild card in the game International Sweetener Colloquium, 8-11 February 2009, Orlando

  11. Crude vs. Corn vs. Sugar indexes Brent Oil +217% CBOT corn As at early June 2008 +201% +14% ICE Raw sugar International Sweetener Colloquium, 8-11 February 2009, Orlando

  12. Why has corn moved up (and down) in line with crude oil but sugar not? International Sweetener Colloquium, 8-11 February 2009, Orlando

  13. Tight global grain markets due to several years of poor crops Stocks-to-use ratios: Corn 15.7% 2008/09 Wheat 22.7% Sugar 46.0% • Corn use for ethanol rises faster than cane use for ethanol International Sweetener Colloquium, 8-11 February 2009, Orlando

  14. US cropland is scarce Corn area increased by 20% in 2007, but total plantings by just 1.3% • Brazilian (non-Amazon) cropland is not scarce • Brazil‘s gasoline prices are government-controlled and do not fluctuate in line with global oil prices International Sweetener Colloquium, 8-11 February 2009, Orlando

  15. Can ethanol eat away the sugar glut? International Sweetener Colloquium, 8-11 February 2009, Orlando

  16. Except for Brazil, ethanol production directly from cane juice is not (yet) a reality on a large scale • Ethanol is often produced from the the sugar by-product molasses (no rival use of cane) • Surplus cane sugar will continue to pressure sugar prices International Sweetener Colloquium, 8-11 February 2009, Orlando

  17. Crude vs. Corn vs. Sugar indexes As at February 3, 2009 CBOT corn +77% Raw sugar +41% +7% Brent Oil International Sweetener Colloquium, 8-11 February 2009, Orlando

  18. World population increase International Sweetener Colloquium, 8-11 February 2009, Orlando

  19. World Sugar Consumption (mln tonnes, raw value) +27 International Sweetener Colloquium, 8-11 February 2009, Orlando

  20. The world needs more sugar (at least in the long term) International Sweetener Colloquium, 8-11 February 2009, Orlando

  21. Who can fill the gap? International Sweetener Colloquium, 8-11 February 2009, Orlando

  22. India: Sugar production (mln tonnes, raw value) +123% International Sweetener Colloquium, 8-11 February 2009, Orlando

  23. Inconsistent government policy on cane and sugar prices leads to sharp cyclical swings • Huge cane arrears lead to sharp downturn in sugar production in 2008/09 • India is not a reliable = consistent sugar exporter but a swing producer who changes back and forth in its net trade position International Sweetener Colloquium, 8-11 February 2009, Orlando

  24. Brazil: Sugarcane production (mln tonnes) +120% International Sweetener Colloquium, 8-11 February 2009, Orlando

  25. Brazil: Sugar vs. Ethanol (in % of the cane crop) International Sweetener Colloquium, 8-11 February 2009, Orlando

  26. Brazil: Car Sales By Engine (units per month) International Sweetener Colloquium, 8-11 February 2009, Orlando

  27. Brazil: Sugar production and exports (mln tonnes, raw value) International Sweetener Colloquium, 8-11 February 2009, Orlando

  28. Brazil‘s sugar output more than doubled since 2000/01 despite its ethanol boom • 2008/09 cane crop growth: 15% • 2009/10 projection: 6 % • Sugar output to rise much stronger in 09/10: • ethanol export prospects fade (1% change in sugar/ethanol mix means 750,000 t sugar) • less global competiton (India!) • Depreciation of Real increases returns in local currency International Sweetener Colloquium, 8-11 February 2009, Orlando

  29. Conclusions • 2007/08 saw another global surplus with an addition to stocks of about 14 mln t over a period of just two years, elevating the stocks-to-use ratio to 49.1% (179 days of consumption). • Current predictions for 2008/09 are for a significant deficit, but surplus stocks will have to be worked off before a return to a healthier fundamental picture. • A price boom as in the 1970s and the beginning of the 1980s is unlikely, given the vast amounts of cane available in Brazil. International Sweetener Colloquium, 8-11 February 2009, Orlando

  30. The key question in the years to come will be how much Brazilian cane will be diverted into producing fuel ethanol and sugar (A 1% change in the sugar/ethanol mix means 750,000 tonnes of sugar). • Outside influences have become almost as important as the sugar market‘s own fundamentals and will continue to do so in the future. International Sweetener Colloquium, 8-11 February 2009, Orlando

  31. The End

More Related